HONG KONG, March 6 (Reuters) – Canada’s Manulife Financial Corp (MFC.TO) plans at least two more high-level hires in China this month as it targets the pension business in the rapidly aging society after taking full control of a Joint has acquired venture, senior officials said.
After becoming the first foreign financial firm to receive regulatory approval to fully own a fund joint venture in November, Canada’s largest insurer has shaken up the unit’s management by appointing a new chairman and general manager.
The company is now hiring two new positions — an assistant general manager of fixed income and a chief operating officer — which it hopes to fill by the end of March.
100% ownership of a local entity with access to China’s newly launched private pension system will help Manulife accelerate its plans to explore the retirement business opportunity, Paul Lorentz, CEO of Manulife Investment Management (Manulife IM), said in a last week Interviewed by Reuters.
last update
Watch 2 more stories
“There is a massive gap in retirement savings (in China), especially compared to other developed markets,” Lorentz said. “I think we have an opportunity to really help the government, the regulator, to shape the industry.”
A shrinking and rapidly aging population in China is raising the alarm over a looming pension crisis in the country, with a state academic body warning that the public pension system will run out of money by 2035.
China’s 1.4 billion people shrank last year for the first time in 61 years. The National Health Commission projects that the cohort of people aged 60 and over will increase from 280 million to over 400 million by 2035 – the equivalent of the entire current population of the UK and US combined.
According to Lorentz, the ratio of China’s pension wealth to its gross domestic product is 10%, in stark contrast to the US’s 171%
To address some of the shortcomings of public and corporate safety nets, China rolled out a private pension system in 36 cities in November, allowing individuals to open retirement accounts with banks to purchase retirement products ranging from deposits to mutual funds.
A number of foreign financial companies have qualified to participate in the program and several of them, including Chinese companies JPMorgan (JPM.N), Warburg Pincus (WP.UL) and UBS (UBSG.S), are preparing for expansion ahead of their annuity offerings in the country’s $3.94 trillion mutual fund market.
China has already been a bright spot for Manulife, as mutual fund assets operated by the joint venture have grown nearly 30% over the past year. Global assets under management shrank 8% to $745 billion in 2022 due to volatile markets.
Growth in private pension assets is “a key focus” for the company in China, and “the growth will be tremendous,” said Michael Dommermuth, the company’s head of wealth and wealth management in Asia.
Reporting by Selena Li; Edited by Muralikumar Anantharaman
Our standards: The Thomson Reuters Trust Principles.
Comments are closed.