Briefing: Yu’e Bao operator seeks diversification in overseas markets

By Nicole Jao
1 min read

Tianhong, controlled by Jack Ma’s Ant Financial, seeks diversification outside China – Reuters

What happened: Ant Financial-controlled Tianhong Asset Management is ramping up expansion efforts for its cross-border business as regulatory curbs at home hampers the growth of its money market fund Yu’e Bao.

“Compared with other industry players, our international business started late. But we’re catching up,” said Liu Dong, head of Tianhong’s international business. The asset management firm launched its first mutual fund targeting Hong Kong stocks earlier this month and is scheduled to roll out another mutual fund product that allows entities in China to invest in overseas markets this year.

Why it’s important: Tianhong’s international business currently amounts to RMB 3 billion ($447.26 million), which is a small compared to its Yu’e Bao fund that has RMB 1.13 trillion ($168.47 billion) in assets under management as of end-2018. Tianhong has been trying to reduce its reliance on Yu’e Bao and diversify its business after Chinese securities regulators tightened supervision of money market funds. Yu’e Bao’s net assets shrank by 28% in 2018; it reached its two-year low by the end of the year.