The recent shift in the ownership structure of ICBC Credit Suisse Asset Management,one of the leading fund companies in China,marks a significant turning point in its operational landscape.Following the approval of this restructuring,UBS is set to replace Credit Suisse as the second-largest shareholder in the company.This transition is noteworthy,particularly given ICBC Credit Suisse's status as a well-known institution within the banking sector,benefiting from its affiliation with the Industrial and Commercial Bank of China (ICBC),often referred to as the "universe bank." However,in recent years,the company has encountered challenges such as talent attrition,a dramatic decline in equity product scale,and a drop in rankings,necessitating a strategic pivot to regain its competitive edge in the market.

The ownership change aligns with UBS's acquisition of Credit Suisse,completed in May 2024.As part of this merger,UBS has assumed the rights and obligations of Credit Suisse,including its 20% stake in ICBC Credit Suisse.Notably,even after this reshuffle,ICBC retains an overwhelming 80% shareholding,maintaining its absolute controlling interest in the firm.

UBS,a global elite wealth management institution,has had a presence in China for over three decades.Its strategy includes establishing financial services and holding a 49% stake in Guotou UBS Fund Management.The previous general manager of Guotou UBS,Shang Jian,had a notable career at UBS,serving as a managing director in its global asset management division.These connections hint at the possibility of enhanced collaboration between UBS and ICBC Credit Suisse,especially in regards to investment research and asset allocation,following the recent changes.

ICBC Credit Suisse now stands at a crucial crossroads in its growth trajectory.After surpassing 800 billion yuan in assets in 2021,the firm saw its growth stall.By the end of 2022,assets had only modestly increased to 833.44 billion yuan,and by late 2024,the figure stood at a mere 837.57 billion yuan,reflecting an ongoing struggle for expansion.

The company's ranking within the mutual fund industry has also deteriorated over recent years.From holding the 9th position in 2021,it plummeted to 13th by the end of 2024.Just a few years earlier,back in 2016,the firm had surged past the 450 billion yuan mark due to its strong backing from ICBC,quickly climbing over 700 billion yuan by the first quarter of 2017,making it the second-largest fund manager in the industry.This trajectory showcased not only its reliance on ICBC's vast distribution network but also its potential for rapid growth.

In tandem with its diminishing standing,ICBC Credit Suisse's profitability metrics related to actively managed funds have shown bleak performances.The firm incurred losses of 8.575 billion yuan and 35.884 billion yuan in 2022 and 2023 respectively,totaling 44.459 billion yuan.Though it managed a small turnaround in the first half of 2024,net profits were only 1.863 billion yuan,presenting a stark contrast to the prior years' staggering losses.

At the center of ICBC Credit Suisse's underperformance is its equity product sector.Traditionally viewed as a typical representative of bank-affiliated funds,the company has leaned heavily toward fixed-income products,leading to a current status that starkly reflects this trend.By the end of 2024,of ICBC Credit Suisse's total asset scale of 837.57 billion yuan,bond and money market funds accounted for 670.35 billion yuan,making up an impressive 80.03% of their holdings.In contrast,the combined scale of mixed and equity funds reached only 151.06 billion yuan – a mere 18.04% share,a considerable drop from 28.96% at the end of 2021.

Revisiting 2021,the Chinese stock market was thriving,which aligned well with ICBC Credit Suisse's performance,especially within its mixed and equity fund offerings.At that time,the scale of its mixed funds stood at 120.55 billion yuan,while equity funds held a value of 111.62 billion yuan.This dynamic was shifting,however,as the mixed funds became the bellwether of the company’s capabilities,outpacing equity fund sizes.Yet,by the end of 2024,mixed fund sizes were effectively halved,dropping to 54.19 billion yuan,compounded by intensifying competition from non-equity funds.

From a performance perspective,ICBC Credit Suisse's equity funds have lagged seriously.According to Wind data,over the past three years,the average return for equity funds was -15.15% and -14.06% for mixed funds,which aligns closely with the industry averages yet fails to showcase any stellar outperformance.Furthermore,even in the positive turnaround of the stock market in 2024,its equity and mixed funds achieved only annualized returns of 11.72% and 8.13%,ranking 53rd and 33rd in the industry respectively.

In the backdrop of these dismal fund performances,the exodus of key talent from ICBC Credit Suisse has played a significant role.Several prominent fund managers,including Zhao Xiancheng,Yan Siqian,Zhu Chengjie,You Linfeng,and Yuan Fang,have left the organization since 2022,eroding the firm’s human capital.Statistical data from Wind indicates that from 2022 to 2024,a total of 15 fund managers exited,ranking ICBC Credit Suisse sixth in the industry for manager departures.This exodus included notable figures like Yuan Fang,the once-vaunted “first lady” of ICBC,who led substantial consumer research teams and had dedicated over a decade to the organization.

At the height of her management in the second quarter of 2021,Yuan Fang oversaw a fund size of 48.196 billion yuan,which was over 40% of the mixed fund size at that time,showcasing her pivotal role within the firm.However,by the fourth quarter of 2022,coinciding with her departure,the scale of the funds she managed collapsed to 22.556 billion yuan.

Notably,Yuan’s swift ascent in the firm's hierarchy had a direct positive impact on the equity fund scale at ICBC Credit Suisse.At the start of 2020,her portfolio size was only 66.91 billion yuan,but within just over a year,this surged to more than six times its size.

Despite exiting the firm,Yuan Fang's flagship fund,which she managed since 2015,retained an impressive total return of 226.91%,placing it among the top three stock funds in its category when she departed.

Alongside Yuan,veteran fund managers like You Linfeng,Huang Aile,and Wang Junzheng – all with over ten years of service at ICBC Credit Suisse – also bid farewell to the firm.Huang,prior to his exit in August 2022,managed the ICBC Small and Medium Cap Growth fund,which had a four-year annualized return of 27.03%,ranking 13th among 524 funds.

Entertainment and ecology funds saw high returns thanks to the efforts of Yan Siqian,another mid-career manager,who during her nearly seven years at the firm,achieved annualized returns of 29.17% and 56.38% for her funds focusing on environment and new energy sectors respectively – both commendable accomplishments in the industry.

As of early 2025,the retirement of veteran manager Zhang Yufan,after 14 years at ICBC Credit Suisse,only further compounded the issue of dwindling experienced personnel,leaving behind a scant number of proficient managers within the firm.

While the managerial turnover partly stems from personal decisions,internal corporate factors deserve attention as well.ICBC Credit Suisse is structured as a platform-based investment and research company and has tended to prioritize this model over promoting individual star fund managers.It espouses a ‘platform,team,integration’ approach,featuring over 15 capability centers and four research sectors,collectively comprising nearly 200 professionals within its investment research team.

This platform-centric ethos has,however,somewhat diluted the value of distinguished fund managers' individual competencies,limiting their degrees of freedom in showcasing their capabilities.

Moreover,the absence of effective talent incentive mechanisms and a limited promotion structure have also contributed to the retention issues.In terms of promotion,aspiring managers typically aim for senior roles,yet many high-ranking positions within ICBC Credit Suisse are occupied by individuals from ICBC,creating a bottleneck for the advancement of fund managers themselves.

Amidst the departures,ICBC Credit Suisse has strived to recruit new talent,successfully hiring 39 new fund managers even as 15 left from 2022 to 2024.However,with nearly 40% of the current workforce comprised of managers with less than three years of experience,the firm faces daunting challenges ahead in terms of ensuring adequate investment quality.

On the compliance front,ICBC Credit Suisse also needs to enhance its management practices.In February 2019,the firm faced penalties of 2.07 million yuan due to violations of anti-money laundering laws,failing to comply with required customer identification obligations.Additionally,in August 2023,the company experienced reprimands for errors in information disclosure,further emphasizing the need for better compliance measures.

As one of the preeminent public fund managers in the industry,the introduction of new foreign shareholders presents opportunities for ICBC Credit Suisse to explore future prospects.However,the focal point of reform remains centered around talent attraction and development – a critical requirement if the firm aims to reverse the trajectory of talent loss,particularly to reinvigorate its equity product segment.