Unleash the UCITS dragon
Mon Apr 16, 2012
Comment by Joy Dunbar, Editor of Absolute UCITS
Like all things associated with China the country's fund
management industry is expected to grow exponentially - with
some estimates suggesting it could grow to $10 trillion by
This development has the potential to mutually benefit the
established European and the fledgling Chinese fund industries.
The growing middle class, the one child policy and an
increasingly aging demographic means that increasingly affluent
Chinese investors require solutions to their investment,
retirement and insurance needs.
The established fund management industries in developed
countries in Europe and the US are being challenged on a number
of fronts - more financial regulation and the extended period
of deleveraging has resulted in saving ratios falling.
But they have the advantage of having some of the largest
established markets with corporate governance and sound fund
These developments have occurred during a time when the Chinese
government has indicated that it wants to become a world leader
in financial services. It has opened its doors to foreign fund
managers, who have bought stakes in local firms, and has
started the process of internationalising of its currency.
The UCITS framework has allowed and will continue to enable
Chinese managers to launch funds using an established and well
Chinese asset managers benefit European investors who have
access to an emerging market strategy via the global
distribution benefits of the wrapper. Also the European asset
management industry benefits through the administrative
services it provides.
The framework has become a global brand and European
regulators, as well as the European fund management industry,
need to respond to the challenge by retaining the reputation of
the UCITS brand.
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