Authored by Anders Corr via The Epoch Times,
Fidelity International (FIL) is reportedly the latest fund manager to plan a pullout from its China fund. FIL launched a wholly-owned subsidiary in Shanghai three years ago, but a lack of demand from retail investors led to disappointing growth.
Reuters first reported the story. According to its sources, "A combination of fierce local competition, frequent leadership turnover and chronic struggles to build scale ultimately convinced global FIL executives that the China retail venture was untenable."
FIL has $1.18 trillion in assets under management (AUM). It started its China fund in 2023. The next year, Reuters saw an internal FIL document that said it needed more than $14 billion in assets to become profitable. After several years, it had reportedly reached only about $670 million (less than 5 percent of the goal) and began planning an exit.
Fidelity follows multiple other global asset managers that are backing away from China amid domestic competition and geopolitical tensions. These include Schroders, Legal & General, and Vanguard. The companies that left China were in stiff competition with domestic funds and Western China funds that had typically first been established through joint ventures (JVs) with Chinese institutions.
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