Manulife moves to enter China market

Manulife has been granted the first Investment Company Wholly Foreign-Owned Enterprise (WFOE) license in China, paving the way for the insurance company to provide its suite of global public and private asset solutions to Chinese investors.

Manulife Investment (Shanghai) will offer a broad range of solutions and a wider market than Manulife's existing joint-venture operations on the Mainland - Manulife-Sinochem Life Insurance and Manulife Teda Fund Management. It would allow investment products that are manufactured around the world to be sold to qualified institutional investors in China which puts Manulife in an 'excellent' position to expand its range of global product offerings to investors in China, the company said.

According to Michael Dommermuth (pictured), head of Wealth and Asset Management, Asia, at Manulife, the WFOE license paves the way for Manulife to serve a broader investor base including small and medium-sized institutions, private banks and independent wealth management platforms.

"We are strongly interested in expanding our existing China-based asset management presence," said Dommermuth. "Potential solution offerings can range from traditional equities and fixed income products to private assets strategies, such as timberland, farmland, commercial real estate, etc."

Manulife qualified for the new license partly because it holds a majority interest - 51%, in Manulife-Sinochem, in addition to other 'stringent' requirements, the Canada-based institution stated in an announcement, adding that the new WFOE business scope includes making investment in approved sectors and providing advisory services, as well as the launch of products offering exposure to onshore securities markets, including equities, fixed income, futures and asset-backed securities, as well as real assets.

China's asset management industry is set for spectacular growth in the coming years, with projections indicating 15% compounded annual growth in the market to US$2.69trn by 2021, Dommermuth noted. "WFOE also allows us to address the outbound institutional market in China through our public and private strategies overseas, which will double its current size of US$890bn to US$1.8tr by 2030," he said.

The new license complements the company's existing joint venture operations in China - Manulife-Sinochem Life Insurance based in Shanghai, which was the first Chinese-foreign joint venture established on the Mainland and currently has US$3.2bn in AUM, and Manulife Teda Fund Management based in Beijing, which manages US$9.8bn. "Manulife-Sinochem was the first foreign invested joint-venture life insurer to sell mutual funds in China; while our strong JV with Teda provides traditional retail and institutional asset management for clients across the Chinese market," Dommermuth said.

Manulife has been the distributor of 32 products mainly in Japan and Taiwan, and has acted as a third party distribution agent on 52 products In Canada.

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