Public Offering Exclusive Fund Products are Selling Hot, Multiple Funds "Sold Out," Purchase Quota Starting at 300,000 is in Short Supply

AI · How Are Customer Needs Evolving Behind the Popularity of Public Fund Separate Accounts?

Cailian Press, March 16 — Reporter Yan Jun
As multi-asset allocation becomes increasingly mainstream, customer segmentation has also become a key focus for the development of public fund products.

According to sources, many fund companies such as E Fund, China Europe, Xingquan, and GF Fund are experiencing strong sales of their separate account products through channels, with many products reaching full capacity. Meanwhile, institutions like China Europe Wealth are intensifying marketing efforts on social platforms like WeChat Moments to high-net-worth clients.

“The development of public fund separate accounts is a great opportunity because single-asset or single-strategy products are no longer sufficient to meet high-net-worth clients’ dual demands for steady appreciation and risk control. Clients’ demand for multi-asset, multi-strategy solutions with a focus on drawdown management has significantly increased, along with a stronger need for professional services, customized solutions, and long-term companionship,” said a senior executive from a leading company to Cailian Press.

Public fund separate accounts typically have a minimum investment of 300,000 yuan, making them more accessible to the general investor. Many fund companies’ separate account products sell out quickly, especially those with good performance. Although most public funds are reluctant to disclose retail segment AUM (assets under management), some top fund houses have revealed that their average AUM per separate account exceeds one million yuan.

Fund companies are beginning to upgrade their services, with two key dimensions of segmentation:

First, on the product side, the concept of allocation is being widely promoted, and product offerings are becoming more diverse. For example, in fixed income +, FOF, and multi-asset funds, more fund companies are building matrices of low, medium-low, and high-volatility products to meet different risk preferences.

Second, on the client side, the shift is from product-centric to client-centric approaches. The primary focus is on KYC (Know Your Customer), followed by matching appropriate products.

In fact, public funds have long offered services tailored to high-net-worth clients. As the industry matures, more funds are focusing on refined development and deepening their separate account businesses. Certainly, in the current environment of fee reductions, issuing separate accounts is crucial for increasing revenue. A senior executive from a top fund house told Cailian Press that by 2025, their main income will come from two sources: one is the scale effect of index funds, and the other is separate account products.

Public Fund Separate Accounts Are Hot, Starting at 300,000 Yuan, with Limited Availability

Recently, sales of public fund separate accounts have been booming. Channels like China Merchants Bank, Ant Group, and Lianlian Pay’s wealth management platforms are reporting that quotas for public fund separate accounts are hard to come by.

Public fund separate accounts are akin to “public fund private placements,” referring to products set up by public fund companies to raise funds from specific clients or accept specific client assets for asset management. These products are generally accessible with thresholds of 300,000 or 400,000 yuan and can benefit a broader range of investors.

Since banks cannot directly sell private placements, public fund separate accounts often involve trust-like structures, but the underlying management remains with the fund companies.

From the distribution perspective, public fund separate accounts are in high demand, with products from China Europe and Xingquan already showing “sold out” status.

Most online platforms also display sold-out statuses for these products.

Fee structures for separate accounts are similar to private placements, including subscription and redemption fees, as well as performance-based fees. For example, one public fund separate account has an agreed performance fee benchmark of an annual return of 5.5% (simple interest). The performance fee is calculated on the portion of asset appreciation exceeding this benchmark, with a rate of 20% on the excess.

This means that if performance is strong, management fee returns can significantly surpass those of typical public fund products.

Of course, adapting to current trends is also a key reason for accelerated deployment. Fund companies cite three main reasons:

1. Growing client demand. In a low-interest-rate environment with increased market volatility and asset return divergence, single-asset or single-strategy products are no longer sufficient to meet high-net-worth clients’ dual needs for steady growth and risk management. This has led to a marked increase in demand for multi-asset, multi-strategy, and drawdown-focused solutions; clients also seek more professional, customized, and long-term services.

2. Changes in industry competition. Previously, competition centered on product issuance and sales volume. Now, more institutions emphasize client retention, asset retention, and long-term service value. High-net-worth clients tend to have higher asset accumulation capacity and stronger service loyalty, making them a key focus for wealth management institutions.

3. Channel transformation needs. Banks, brokerages, and other wealth management channels are rapidly shifting from product distribution to comprehensive wealth management. This transformation demands products and services that can meet high-net-worth clients’ needs, further driving the development of such offerings.

For example, China Merchants Bank’s “Zunxiang Wealth Management” explicitly features public fund separate accounts, clearly showcasing the manager to investors.

Citing the Longying Plan, industry experts say it has “almost saved the entire FOF industry” and has led the industry’s investment in FOFs. From this perspective, channel transformation has a significant impact on product sales.

Public Funds Upgrading Operations for High-Net-Worth Clients

Focusing on investors is the overarching goal for all asset management firms. In this context, segmented marketing based on client tiers has become a priority.

A senior executive from a leading fund company told Cailian Press that high-net-worth clients often have complex needs, requiring more refined approaches around client demands, asset allocation, and services.

For example, in terms of philosophy, they emphasize starting from the client’s overall wealth goals, providing targeted allocation advice based on risk appetite, liquidity needs, investment horizon, and return targets, rather than simply recommending single products.

Service offerings include asset allocation and account diagnostics, multi-strategy multi-asset investment solutions, regular portfolio reviews and rebalancing suggestions, and post-investment support and communication during market volatility.

Service formats are tailored according to client asset size, risk tolerance, investment experience, and liquidity needs, matching appropriate resources and service frequency.

The executive pointed out that high-net-worth clients’ needs are often closely related to specific wealth scenarios. For example, business owners may focus on operational cash flow and idle funds, while families may prioritize education, retirement, and inheritance planning. Digital tools are also employed to identify these scenario changes early, enhancing service foresight and matching.

Challenges Facing Public Fund Separate Accounts

Compared to private placements, public fund separate accounts generally attract lower-risk investors. One reason investors choose them is the comprehensive risk control and compliance framework, which offers transparency and stability.

However, compared to private placements, separate accounts face multiple challenges. A senior executive from a public fund noted that the business demands higher levels of customization. Public funds excel at standardized, large-scale products, but separate accounts require tailored solutions based on individual client goals, which raises the bar for investment management, client service, and operational coordination.

Second, customer service complexity increases. High-net-worth and institutional clients care about not only returns but also volatility control, liquidity arrangements, information transparency, and account visibility. Therefore, separate account services need to be more comprehensive, beyond just investment management.

Third, organizational mechanisms must be more flexible. Response speed, solution design, and client communication frequency differ from traditional public fund operations. Balancing professionalism and compliance with customization and service efficiency remains a common industry challenge.

Moreover, the development of separate account products by public funds also faces skepticism. How fund managers will allocate resources between public and separate account products to maintain performance and avoid neglecting public fund investors is a concern—particularly whether the same fund manager can balance performance across both channels without diverting too much focus to one side.

(Reported by Yan Jun, Cailian Press)