Schroders Exits China Mutual Funds, Transfers 3 Funds to Neuberger as Foreign Firms Hold 0.1%
Updated
Updated · Financial Times · Jun 1
Schroders Exits China Mutual Funds, Transfers 3 Funds to Neuberger as Foreign Firms Hold 0.1%
3 articles · Updated · Financial Times · Jun 1
Schroders won Chinese regulatory approval to transfer three mainland mutual funds and an investment team to Neuberger, ending a business launched only three years ago.
Rmb1.7bn of Schroders assets in China underscored the struggle: six wholly foreign-owned managers have gathered just Rmb34bn, or 0.1%, of the Rmb36.5tn market after investing about $800mn since 2020.
Distribution hurdles, weak brand recognition, worsening US-China tensions, slower growth and the property slump all made it hard for new foreign entrants to scale equity products.
Rmb25bn is roughly the break-even threshold for a mainland mutual fund business, consultancy Z-Ben said; only Neuberger and BlackRock are above Rmb10bn, while Fidelity has about Rmb4bn.
Foreign groups that expanded through existing joint ventures have fared better, with firms such as JPMorgan, Manulife and Morgan Stanley managing about Rmb373bn, or roughly 1% of the market.
Why are the world's top asset managers failing in China despite an $800M investment?
With foreign funds struggling, are joint ventures the only real path to China's market?