The potential of the Chinese market

Eurizon – the asset management company of the Intesa Sanpaolo Group – has a range of funds dedicated to the Chinese market that offers diversification in terms of asset class and development of investment strategies:

• Bond
  to invest in an ever-expanding market through exposure to Renminbi-denominated bonds
• Multi-asset
  leverages Chinese bond and equity expertise
• Equity
  grants access to the Chinese stock market directly through A-shares.

The Intesa Sanpaolo Group has long understood the enormous potential offered by the Chinese market to investors and companies.

Eurizon operates in the Chinese market with various resources and through qualified channels:

• partnership (49%) in Penghua Fund Management, an asset management company based in Shenzhen and among the top 10 local operators
• Eurizon Capital Asia Ltd, specialising in Asian markets and based in Hong Kong
• Eurizon SLJ Capital Ltd, which has a highly specialised Chinese management team with international experience based in London.

In 2007, when the partnership was launched, Penghua Fund Management had assets worth €20 billion: as of March 2021, it had reached €116.2 billion, growing more than 13% since the start of the year and 30.7% over the twelve months, with net inflows for the first quarter of the year exceeding €10 billion.

The “2021 China Rankings” research by Z-Ben Advisors certifies the success of Eurizon’s activities in the country: it is the only Italian company among the top 25 foreign asset managers, ranking 15th globally and 9th among the top managers for China onshore in the management of Chinese capital.

In addition, the Intesa Sanpaolo group leader is the first foreign bank to carry out Wealth Management activities in China through its own company, YI TSAI (meaning Italian Talent), which is part of the International Subsidiary Banks Division.

Continued economic growth and gradual opening to foreign capital have ushered in a new era in China, a country whose rapid development is recognised as one of the most important events in world economic history. The change underway is supported by two pillars: consumption and technological innovation.

It is worth remembering that:

• Chinese consumers are the engine of the world economy and help generate approximately 3/4 of the country’s growth
• by 2025, China will have become a hi-tech superpower and is already the world’s largest robotics market
• profound socio-demographic changes are taking place, such as the rise of the middle class, the rapid ageing of the population, and the transformation from an agrarian society to the realm of megacities.

China’s contribution to global GDP growth is 28% (IMF 2018 data), while the asset management industry contributes only 7% to global AuM (Asset under Management), highlighting a gap that is expected to be closed in the coming years.