Chinese opportunities await fund managers

Mick O'Brien

China represents a vast untapped market for the funds management industry as it begins to address the funding of its national social security system, according to the chief executive of a leading funds management firm.

Speaking recently at a presentation from leading chief executives Invesco’s Mick O’Brien said: “We’re starting to see the development of a funds management industry over there and in fact we’ve just seen recently the national social security fund in China starting to invest funds offshore for the first time. I think it was something like US$1 billion they allocated offshore.”

“Fund managers around the world are certainly going to be looking at the Chinese market and looking at their massive pension liabilities that are unfunded at this point. We’re talking $1 trillion of unfunded liabilities there,” he added.

NAB Capital chief executive John Hooper said the flow of capital through Chinese companies is another source of opportunity for financial service firms in this country.

“There is an enormous flow of Chinese capital through their companies into this country. That’s partly a search for raw materials and it’s partly because this is a very stable part of the Pacific Rim,” he said.

“So we’re looking forward to the opening up of investment opportunities in China and the movement of capital more freely in that country and we’re already seeing on the commercial side significant activity,” Hooper concluded.