After what has appeared to be a long hiatus, AMP is moving ahead with plans to offer asset management services to the Chinese market through its strategic alliance with China Life.
A public disclosure last week for approval of a business name registration for China Life-AMP indicates the two are likely to go ahead with a joint venture funds management company, according to Chinese research firm Z-Ben Advisors.
Z-Ben told clients: “(we) believe that the new firm is a potentially disruptive competitor that may provide an entirely new model for JV fund management company operations in China. The combination of a large, bank-independent distribution base and strong long-term partnership is a powerful one, and comes at a time when distribution bottlenecks and capital starvation have blighted post-2008 JVs’ business plans. Competitors will watch its progress closely.”
Chinese authorities have recently streamlined and sped up the application processes for various financial services licenses. Z-Ben believes it is possible China Life-AMP could be fully operational by the end of the year.
The big five Chinese banks control most of the distribution of managed funds in China, but the less-powerful life offices offer a potential alternative channel.
Other Chinese life offices to so far formulate relationships with other asset managers are: PICC, Ping ‘An, Taikang and Huatai. Z-Ben says the prospective partnership pool also includes: China Pacific, Taiping, China Re, New China, Minsheng, Anbang, Sino-Life, Union Life and Sunshine.
AMP set up an office in Beijing in 1997 and announced a strategic alliance with China Life in 2009 for asset management and pensions but progressing a range of funds to the market has, until now, been very slow.