Finance Association, July 26 (Reporter Lin Jian) China Merchants Asset Management's official website recently revealed that the company's general manager column has been changed to Yi Weidong, and Yang Yang is no longer in office. The reporter learned that Yang Yang has taken up a new position in China Merchants Securities's proprietary management department. In about a year, China Merchants Asset Management completed the renewal from the chairman to the general manager. In July 2023, Zhang Liangyong, former general manager of China Merchants Securities Research and Development Center, officially became the chairman of China Merchants Asset Management.

It is worth noting that, like Chairman Zhang Liangyong, took office, Yang Yang and Yi Weidong are also personnel transfers within the China Merchants Securities system. Yi Weidong was previously the general manager of the China Merchants Securities Custody Department. The escrow outsourcing business is China Merchants Securities's dominant business. According to his resume, since joining China Merchants Securities in 1997, Yi Weidong has been involved in risk management in securities investment, asset management, and fixed income. In 2019, Yi Weidong joined the escrow department and became the general manager of the trusteeship department. During his tenure, he promoted the rapid development of China Merchants Securities escrow outsourcing business, and China Merchants Securities Custody Department became the industry leader.

The picture shows the list of China Merchants Asset Management executives. The company's general manager column has been changed to Yi Weidong

China Merchants Securities Asset Management Subsidiary was established in April 2015, formerly known as China Merchants Securities Asset Management Headquarters. It is one of the earliest brokerage asset managers in China to obtain fiduciary asset management, innovative pilot projects, and QDII qualifications. Its business strength has long been in the first tier of the industry. As of the second quarter of this year, assets amounted to 39.05 billion yuan.

Some industry insiders told the reporter that for the brokerage asset management industry, the most critical thing is to find a good position in the entire asset management ecosystem and give full play to one's advantage. According to interviewees, accurate positioning is not only the starting point of sailing, but also the key to determining the distance and success or failure of a voyage. In a complex and changing asset management ecosystem, brokerage asset management institutions need to dig deeper into their unique competitive advantages and break the game with differentiated strategies. “Long-term potential growth points for brokers' asset management need to be explored.”

Among them, with the implementation of the new asset management regulations, brokerage asset management institutions in particular need to make continuous efforts in compliance management. The new regulations put forward stricter requirements on the classification, investment scope, leverage ratio, and information disclosure of asset management products. Moreover, with the rapid development of cutting-edge technologies such as big data, artificial intelligence, and blockchain, traditional asset management models are undergoing profound changes. In terms of talent supply, brokerage asset management also needs more attention.

The reporter noticed that Yi Weidong once expressed the importance attached to ecology in an exclusive interview with the media. In response to the question of what role the escrow outsourcing business plays in the asset management industry, he mentioned that it is necessary to build an ecosystem externally and make good internal connections.

Challenge: Asset management has entered profound changes, and the company's size and profits are under pressure

Being the head of investment promotion management is the starting point for Yi Weidong's new role. He faces both challenges and opportunities. Yi Weidong is familiar with China Merchants Asset Management. He once served as the Deputy General Manager of China Merchants Securities Asset Management.

Specifically, in terms of challenges, what can be seen is the overall pressure on the brokerage asset management industry. By the end of 2023, the size of private equity asset management products of securities companies and their asset management subsidiaries was 5.3 trillion yuan, down 18.5% from the end of the previous year.

Investment management is one of them. Data show that in 2022, China Merchants Asset Management's revenue exceeded 1 billion yuan. By 2023, revenue was 0.833 billion yuan, a decrease of nearly 20%, and net profit was only 0.264 billion yuan, a decrease of 35%. China Merchants Securities stated in its 2023 annual report that the revenue of the company's investment management business segment decreased by 21.53% year on year. The main factor was the decline in the company's China Merchants Asset Management asset management scale, which led to a year-on-year decline in management fee revenue.

Increased competition in the industry is also an external test. 2023 is the year when brokerage firms were approved to establish asset management subsidiaries. Five companies, including Huafu Securities, were approved and entered 2024. According to the official website of the Securities Regulatory Commission, Cinda Securities and Capital Securities were the first batch of brokerage firms to receive feedback on applications to establish asset management subsidiaries. Currently, brokerage firms that are still queuing up to set up asset management subsidiaries include CICC, CITIC Construction Investment, Huafu Securities, Huaxin Securities, and Guohai Securities.

On May 23 of this year, Guolian Asset Management completed the establishment process and received the “License to Operate Securities and Futures Business”. With the establishment of the Guolian Asset Management, it also highlights the establishment of the “one participation, one control, one card” layout of the League of Nations Securities. On July 18, Huaan Securities issued an announcement stating that Huaan Asset Management obtained a license to operate securities and futures business. This means that in the future, Huaan Asset Management will exhibit its business in an independent capacity.

Up to now, the industry has set up more than 30 brokerage management units. Also affecting the brokerage asset management exhibition industry in the future are policy orientation and industry transformation considerations. On July 1, the “Regulations on the Administration of Securities Transaction Fees for Publicly Raised Securities Investment Funds” were implemented. Commission cuts affect the asset management of brokerage firms holding public offering licenses and the cooperation model with their parent companies.

As the asset management industry is undergoing profound transformation to service, the public offering process has slowed down, and “policy dividends” are gradually weakening. Brokerage asset management institutions need to respond carefully and gradually adjust their business models. In particular, they should closely match the pace of the industry's public funding process to ensure long-term steady development. It is an indisputable fact that the “Matthew effect” in the brokerage asset management industry has intensified in recent years.

Judging from the data, judging from data in recent months, the scale of private equity management, public funds, and corporate ABS managed by brokerage firms has all achieved positive growth to varying degrees. Among them, compared with the end of 2023, about 80% of the new filing scale this year came from fixed income products, and “fixed income +” is still the core driving force for the growth of brokers' asset management scale.

Opportunity: New public offering license approved, simultaneous recruitment of deputies

The opportunity comes from the increase in public offering licenses. Overall, the enthusiasm of brokerage firms and their asset management subsidiaries to seek public funding continues unabated. Broker asset management applying for the qualification of a public offering manager currently includes Guangfa Asset Management, Guangzheng Asset Management, Anxin Asset Management, Guojin Asset Management, etc.

In 2023, China Merchants Securities Asset Management became the first brokerage asset management to receive a public offering license after the implementation of the new “One Participation, One Control, One Card” regulations.

First, China Merchants Asset Management obtained in 2023; second, the company holds 49% of the shares in Bosch Fund; third, the company also holds 45% of China Merchants Fund's shares.

China Merchants Asset Management is speeding up the layout of the newly obtained public offering license. Just when the general manager took office, China Merchants Asset Management announced the recruitment information for the position of Deputy General Manager on July 23, which is mainly responsible for equity investment and public fund business. In terms of eligibility requirements, the announcement emphasized that candidates must have at least 5 years of experience in public fund management or securities asset management.

The picture shows the recruitment information for the Vice President of China Merchants Asset Management

China Merchants Securities once pointed out that competition is fierce on the public offering circuit, and the company's asset management subsidiaries face great business challenges. After obtaining a public offering license, the company will make full use of internal collaboration and follow the path of differentiated development. On the basis of improving continuous marketing, the company will focus on deploying medium- and low-risk fixed income public fund products, such as public debt bases, fixed income +, etc., and take the opportunity to lay out equity public fund products. The company will continuously improve active management capabilities, work hard on internal skills, gradually expand the scale of public fund management, and enrich the public fund product line.

China Merchants Securities stated in its annual report that China Merchants Asset Management will seize the opportunity to obtain a public offering license, combine its advantages to follow the differentiated development path of “boutique brokerage asset management”, take multiple measures to enhance active asset management capabilities and scale, vigorously lay out the public equity product line, upgrade the risk control system, and build a robust asset management institution with brokerage characteristics driven by two wheels of investment, research and marketing.