China Everbright Ltd. (SHSE:601818), an asset management firm that has grown assets under management (AUM) at a 30% CAGR over the last five years, is another example. According to market research firm Oliver Wyman, as of 2013, just 3% of China’s RMB 145 trillion in investable assets was held in mutual funds. As investment constraints for institutional/state-owned investors are relaxed, Chinese households shift from saving to investing, and China pushes to internationalize the RMB, AUM in China are expected to grow from RMB 4 trillion in 2013 to RMB 24 trillion in 2020. In addition, we believe low interest rates driven by the government’s economic stimulus will compel more households to move assets out of traditional, low-yielding products such as savings accounts into professionally managed products. Taken together, we believe these trends represent a massive opportunity for fund managers such as China Everbright.
From Baron Funds' May 2016 Baron Insight: Investing in Financials.
