Insurer-owned Sun Life Everbright AM is set to begin operations as the 12th firm of its kind in China amid signs that the regulator is speeding up its approvals process for such applications.
The asset manager received a licence from the China Insurance Regulatory Commission (CIRC) on February 21, entitling it to invest in alternative assets such as infrastructure and real estate as well as government and corporate bonds, listed equities, mutual funds and bank deposits.
It was permitted to set up in Beijing last September with registered capital of Rmb100 million. Between then and now it has put in place a team of investment research and risk management professionals, largely drawn from its parent company Sun Life Everbright.
The asset management arm’s legal representative is Xie Zhichun, according to the CIRC website.
Hu Yan, senior adviser to Sun Life Financial China, tells AsianInvestor the asset management firm will initially only manage its parent’s assets, which last August Chinese media reported at Rmb13.7 billion (Sun Life declines to corroborate this figure).
She confirms it is developing a fixed income product backed by infrastructure projects for prospective external clients (other insurers), and expects it to be available “in a couple of months”.
She adds the firm will focus on onshore investments for the foreseeable future. “The company is new so our focus will be on the domestic market, although we will consider overseas expansion if and when we are permitted to do so by the regulator,” Hu says.
In a statement, Sun Life president and CEO Dean Connor identifies growth in Asia and global expansion of its asset management capabilities as strategic priorities. He notes that the firm has insurance operations in China, India, Indonesia, the Philippines and Hong Kong, while it works with over 100 external investment managers.
“The successful establishment of this asset management business in China is an important milestone for the company and will further strengthen its position in the asset management market in the region,” he is quoted as saying.
Dikran Ohannessian, president of Sun Life Financial Asia, points to the new firm’s exciting prospects given the growing size of China’s middle class.
Sun Life Everbright AM is the 12th insurance asset manager to be permitted to set up in China, and there is evidence that this approvals process is gathering pace.
The CIRC approved seven insurance asset management firms between 2005 and 2006, with the People’s Insurance Company of China and China Life having already set up AM arms in 2003.
But after September 2006 there was a four-year hiatus when no approvals were granted. This was broken in May last year when Anbang Insurance acquired a permit, quickly followed by Sino Life in July. In other words, this latest licence is the third to be issued in the past 10 months.
Established in April 2002, Sun Life Everbright is a joint venture between China Everbright Group (50%), Sun Life Financial (24.99%), Anshan Iron and Steel (12.505%) and China North Industrials (12.505%).