Behind The "Ranking War" Of Private Equity Management Of Securities Companies

The scale of active management of private equity management of securities companies continued to grow.

China Asset Management Association (hereinafter referred to as CFMA) announced the scale of all fund businesses in November 2020.

According to the data, in the third quarter of this year, the average monthly scale of private equity management of the top 20 securities companies totaled 6.33 trillion yuan, down 267.9 billion yuan compared with the second quarter. However, the average monthly scale of actively managed assets increased by 19.5 billion yuan to 3.37 trillion yuan compared with the second quarter.

Only from the data of 20 institutions with the top management scale, the proportion of their private initiative management scale has further increased, reaching 53.19%.

Behind the data, the industry development trend presents a series of new signals.

Highlight the effect of "eight industries"

From the data disclosed by CFA, the "28 effect" of private equity management industry of securities companies is still in existence.

As of the end of September this year, the private equity business scale of securities companies and asset management companies was about 8.36 trillion yuan. In the third quarter, the average monthly scale of private equity management of the top 20 securities companies totaled 6.33 trillion yuan. Although the month on month decrease was 267.9 billion yuan, the scale of private equity management of the top 20 securities companies accounted for about 75% of the whole industry.

The same "head effect" is also reflected in the top private equity firms.

According to the data, the average monthly scale of private equity management of CITIC Securities reached 1.1 trillion yuan in the third quarter, firmly occupying the first position in the industry.

After that, China Merchants Investment Management decreased by 500 billion yuan compared with CITIC Securities, and the average monthly private equity management scale was only 606.19 billion yuan.

In addition, among the top 20 securities companies, only Guotai Junan asset management and Huatai Securities Asset Management exceeded 500 billion yuan per month, reaching 572.158 billion yuan and 552.228 billion yuan respectively. The average monthly scale of BOC securities, Shenwan Hongyuan securities and CSCI exceeded 400 billion yuan, ranking behind the above-mentioned securities companies.

In contrast, Huafu securities, ranked 20th, has a monthly average private equity management scale of less than 100 billion yuan, only 99.012 billion yuan. Only in the top 20 in the industry, the scale gap of private equity management of securities companies has been significantly widened.

After excluding the data of China asset management and Great Wall Securities, only 19 companies of China asset management and Great Wall Securities entered the second quarter. Among them, CICC increased the most, reaching 44.01 billion yuan, with an increase rate of 28.03%.

Among the remaining 14 institutions, 11 have declined by more than 10 billion yuan. Among them, Shenwan Hongyuan securities had the largest decline, accounting for 55.148 billion yuan. CITIC Securities, which ranked first in the industry in terms of average monthly private equity management in the third quarter, also fell 51.31 billion yuan month on month. In addition, the monthly average scale of private equity management of Huafu securities, which ranked the bottom, also declined the most, reaching 33.44%.

After the implementation of the new asset management regulations in 2018, it has become a "compulsory course" for securities companies to go through channels and improve their ability of active management.

According to the analysis of Kaiyuan securities, the asset management business revenue of listed securities companies in the first three quarters of 2020 is 26.5 billion, with a year-on-year growth of 24.7%, and the growth rate of performance has been improved. Among them, the asset management business income in the third quarter was 9.6 billion, with a month on month growth of 8%. The industry asset management income kept expanding, while the influence of de channel was gradually weakened, and the decline of securities companies' asset management scale gradually slowed down. In addition, the scale of securities companies' active management also shows an upward trend. At the end of the second quarter of 2020, the scale of collective asset management is 2.0 trillion, an increase of 2.4% over the beginning of the year and a year-on-year growth of 4.0%.

In this context, compared with the overall asset management scale, the third quarter securities companies' active asset management scale ranking is more worthy of market attention.

According to the data released by CFA, the average monthly scale of assets actively managed by CITIC Securities still ranks first in the industry, reaching 613.856 billion yuan, while Guotai Junan Asset Management Co., Ltd. ranks next with 358.639 billion yuan. After the two leading institutions are China Merchants asset management, Huatai Securities Asset Management and Guangfa asset management, whose active management scale is more than 200 billion yuan, ranking third, fourth and fifth in the industry.

The general trend of comprehensive transformation

However, large scale alone can not fully demonstrate the strength of the organization, and the proportion of active management scale is also a key consideration.

Only from the data of 20 institutions with the top management scale, the proportion of private initiative management scale has further increased, reaching 53.19%.

Among them, the active management scale of CICC reached 86.76%. In addition, the active management scale of Huarong securities, Zhongtai asset management and Guangfa asset management also accounted for more than 70%.

"CICC's asset management business is relatively deep, and its CICC fund is the first fund management company initiated by a single shareholder. CICC wealth, which was established after the merger of CIC securities in 2019, also directly improves the company's asset management scale. ". According to the introduction of non bank analysts of securities companies, CICC is also one of the earliest institutions in China to provide overseas investment management services. As early as 2005, CICC Hong Kong asset management was wholly established by CICC Hong Kong.

Huachuang securities also said that CICC's active asset management accounted for a relatively high proportion, and there was no pressure for transformation. With the increasing demand for standardized investment and financial products, the asset management business of CICC will have a lot of room for development.

According to the incomplete statistics of 21st century economic report, CICC issued 25 job recruitment notices related to asset management business in 2020 alone, and more than half of them are front-line business posts.

"Compared with fund companies, asset management of securities companies is still lack of active management ability, and recruitment of talents to improve investment and research ability is definitely one of the means.". Said non bank analysts of the securities companies.

With the bank's financial subsidiaries and foreign public funds joining the industry, the industry competition is becoming increasingly fierce, which puts forward higher requirements for securities companies' active asset management ability.

Huatai Securities said that for large-scale comprehensive securities companies, asset management business should, on the basis of grasping customer demand and structural changes, rely on the full business chain cooperation and integrated professional advantages, integrate resources, strengthen innovation, improve product layout, continuously improve investment research ability and asset allocation ability, and comprehensively transform to the connotative growth direction of active management.

In September this year, Li Shaojun, who was newly transferred to the vice president of Guotai Junan asset management and also the president of the Investment Research Institute, once said that he would bring the top-down research system and framework formed during his previous tenure as deputy director of Guotai Junan Research Institute to the asset management company. "Guotai Junan asset management should strengthen the ability of equity investment in the future, not only to strengthen the development of bottom-up investment strategy, but also to further strengthen the construction of top-down research framework.".

Huabao Securities pointed out that the overall transformation of securities companies and active management is the general trend. With years of accumulation in investment research and team building, securities companies have strong competitive advantages in the research and investment fields of stocks, bonds, derivatives and other securities, which is conducive to the comprehensive transformation of securities companies' asset management active management. In the process of transformation, asset management of securities companies relies on securities companies to form synergy advantages with other businesses at the capital end, product end and asset end, which helps securities companies break through the competition.

?