Fidelity International (FIL) is assessing a withdrawal from its wholly owned fund business in China, reported Reuters.
The Bermuda-based firm, which oversees $1.18tn in client assets worldwide, is considering a full exit from the onshore unit around three years after it began operations, according to sources.
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Sources cited by the news agency said intense domestic competition, repeated management changes and persistent difficulty in reaching sufficient scale led senior executives to view the retail business in China as unworkable.
In a statement to Reuters, FIL said:
“China remains an important market for Fidelity International and we continue to believe it offers attractive long-term opportunities both for our business and for investors. There is no change to report on our strategy or market presence.”
It is not yet clear how FIL would reorganise or wind down its 14 retail fund products in China, which manage 4.5 billion yuan ($670m) in assets.
A 2024 internal document reviewed by Reuters showed this was far below a goal set for 2029. The company believed the China operation would need at least $14bn in assets to break even.
Assets under management at the China unit reached a high of 6 billion yuan a year after launch, then fell by 25% by the end of June, according to the latest product filings.
One source said the Shanghai-based business employs close to 100 people.
The China Securities Regulatory Commission told Reuters it had not received any formal application from FIL to withdraw.
Any decision to leave would still need regulatory clearance and could yet change.
Business registration records show FIL has invested $218m in the unit.
Earlier this year, Schroders also announced exit from its wholly owned fund business in China and agreed to hand its products to Neuberger Berman.
In a statement to Private Banker International at the time, the company confirmed it has reached an agreement on the proposed transfer of three funds – Schroder Heng Xiang Bond Fund, Schroder China Dynamic Equity Fund, and Schroder Tian Yuen Bond Fund.
