Over the past few years, one of the most noticeable trends in the asia economy has involved the rapid growth of the asset management sector. A common theme in Asia economic news is the so-called asset management “Asian awakening”, characterized by double-digit growth rates and a very active market that shows no sign of stopping in the near future. |
Of course all eyes are set on China due to the sheer size of the market and especially so since the country has been making gradual moves towards deregulation and liberalization. According to a 2018 report, asset management in China has a market value of $7.4tn and is likely to expand further to account for 15% of the global industry within the next five years. Approximately 65% of all global asset management inflows go to China, but the rest of the region isn’t exactly lagging behind.
Industry growth rates for the continent dwarf those we observe in Europe or North America, in particular when it comes to profits. In 2018 alone, profits for the whole region reported a 200% increase, compared to growth rates of 48% for the same time period in the US or 42% in Europe.
Which Factors Are Driving Growth?
Behind this phenomenal growth are a number of socio-economic trends: wealth creation and the ongoing growth of the middle class across Asia, the maturity of capital markets, and regulatory reforms that make these markets more attractive in the eyes of global investors.
Adding to this is digital disruption and in particular the appearance of wealth platforms, which signal the interest of Asian asset managers in customized and sophisticated solutions. There’s still much to be done in the realm of digital capabilities to achieve fully-fledged digitalization within the Asian asset management sector, but digital wealth platforms solutions across the region are gaining popularity among the younger and wealthier generations who are digitally smart and comfortable using robo asset management advisers with low entry barriers.
On that note, the growth of Asian asset management market is connected to significant demographic changes such as population growth. As an example, take two of the continent’s most populous and fast-growing economies: India and Indonesia, which appear in a McKinsey report among the top 5 in Asia when it comes to the highest asset flows.
Indian economygrowth rates have recently slowed down, but the country ranks first in the list of high-net or ultra-wealthy individuals in Asia, who have started to move towards stock and equity-focused funds.
In Indonesia economy growth is reaching its “golden moment”, and the country is among the top 5 in Asia in terms of numbers of high-net worth individuals. Asset management in Indonesia is still an emerging market, but activity is on the rise and so are profits on the whole. According to analysts, there’s plenty of scope for developments long as the offer is diversified and features products that generate interest among local investors.
Overall, the dynamic and fast-paced Asian economy presents exciting challenges and opportunities to asset managers interested in broader horizons. Kindly click here asia fund managers for more information about Asian asset managers
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