(Yicai) April 14 -- Smaller asset managers in China, once prized as scarce financial resources, are now finding it hard to attract stake buyers despite discounts as poor performance, size, and weak competitiveness have made their public fund management licenses far less attractive than they once were.

Along with small operating revenue, which often closely correlates to the size of assets under management, the limited competitiveness and weak performance of small and medium-sized asset managers in China has limited their investment appeal and valuation upside, according to industry insiders.

More than 60 percent of them manage less than CNY100 billion (USD14.7 billion) of assets, while the largest single company in the sector manages over CNY2.5 trillion (USD366.6 billion), according to data from Wind Information. This huge disparity is the result of the systematic challenges that smaller firms face in terms of investment research, distribution channels, and brand resources.

Zhejiang Native Produce and Animal By-Products Import and Export Group put its 20 percent stake in Topsperity Fund Management up for sale on April 9 for a minimum of CNY128 million, after an attempt last June to sell it for CNY142 million drew no buyers.

Last year, Shanghai-based Topsperity swung to a net loss of CNY11.2 million from a net profit of CNY13.3 million in 2024 after operating revenue plunged 71 percent to CNY64.9 million. As of March 31, it had net AUM of CNY73.4 billion, ranking 77th among China’s 164 asset management companies, according to Wind data.

Other stakes have also failed to sell. Huachen Trust, the largest shareholder of Mirae Asset Management, did not succeed in auctioning off its 40 percent stake for CNY17.2 million last November. It then discounted the price by over 70 percent to CNY4.8 million in December, but still had not attracted any bidders when the auction closed at the end of January.

On April 3, the second- and third-largest shareholders of Zhonghai Fund Management -- Guolian Minsheng Securities and French bank Edmond de Rothschild -- put their entire 58.4 percent stake in Zhonghai up for auction at CNY267 million, according to the Shanghai United Assets and Equity Exchange.

Smaller asset managers should stop trying to be comprehensive and instead focus on niche areas such as quant-enhanced products, “fixed income plus” strategies, and sector-themed funds to build stronger differentiation with top-tier rivals, an analyst at a major Chinese securities firm advised.

Editor: Futura Costaglione