Amundi banks on financial linkages

Amundi Asset Management, the asset management arm of France-based investment bank Credit Agricole SA, is banking on more cross-border initiatives in the financial sector between the Chinese mainland and Hong Kong to tap the burgeoning demand of mainland investors' for global assets.

The Chinese mainland, Hong Kong and Taiwan are the fund manager's key growth markets whereas the assets under management (AUM) sourced from the mainland and Hong Kong jumped 15.4 percent and 13.9 percent respectively in 2017.

The fund manager has signed distribution agreements with Agricultural Bank of China and e-commerce giant Alibaba Group Holding's affiliate Ant Financial to distribute fund products on the mainland through physical and digital channels.

The fund manager also inked a memorandum of understanding with Agricultural Bank to deepen its strategic partnership after the lender became a cornerstone investor of Amundi in 2015.

It is also planning to participate in various cross-border linkages in the financial sector between the mainland and Hong Kong, so that the fund manager can leverage on these initiatives to launch more investment products for mainland customers.

"Chinese investors, be it retail and institutional, are into global asset allocation, something that was not possible earlier. Thanks to the gradual opening of the capital account, there will be more and more money available for overseas allocation," said Zhong Xiaofeng, Amundi's North Asia chief executive officer.

Asset management business on the mainland stood at about 53.6 trillion yuan ($8.25 trillion) at the end of last year, up 3.5 percent, according to the Asset Management Association of China.

Business advisory firm Casey Quirk said the asset management industry in the mainland is set to expand fivefold to $17 trillion by 2030. IBIS World, a global business intelligence information provider, forecasts industry revenue to grow by 5.7 percent every year over the next five years to reach $18.76 billion in 2022.

Major cross-border financial initiatives between Hong Kong and the mainland include the Shanghai-Hong Kong Stock Connect in 2014, the Shenzhen-Hong Kong Stock Connect in 2016, and the northbound trade of the Bond Connect in 2017. The Mutual Recognition of Funds (MRF), launched in 2015, allows reciprocal purchase and sale of mutual investment funds domiciled in Hong Kong and the mainland.

"We are expecting stronger growth in the mainland, driven by various levers such as MRF with Hong Kong," said Yves Perrier, chief executive officer of Amundi Group.