The era of "performance-driven" compensation has arrived, with major reforms to public fund incentives after three years. Nearly 1,000 fund managers face potential pay cuts.
The recently released "Guidelines for Performance Assessment Management of Fund Companies (Draft for Comment)" has sparked industry debate. The guidelines impose restrictions on dividends paid by fund companies to shareholders, requiring them to prudently determine payout frequency and ratios based on long-term fund performance and investor returns. Companies with poor fund performance or significant investor losses over the past three years should reduce dividends appropriately.
Huatai-PineBridge Fund has paid dividends exceeding 100 million yuan to Huatai Securities for three consecutive years. According to Huatai Securities' 2024 annual report, Huatai-PineBridge Fund reported revenue of 2.313 billion yuan and net profit of 730 million yuan. With Huatai Securities holding a 49% stake, it received 155 million yuan in dividends, implying total shareholder dividends of 316 million yuan (43.29% payout ratio).
Over the past decade (2015-2024), Huatai-PineBridge Fund has accumulated 3.201 billion yuan in net profits while distributing 1.413 billion yuan in dividends, with Huatai Securities receiving 692 million yuan.
Despite non-monetary AUM growing 8.9× over ten years to 579.5 billion yuan (industry rank #8 in 2024 vs. #19 in 2015), revenue only increased 3.57× to 2.313 billion yuan (rank #17) and net profit grew 4.45× to 730 million yuan (rank #24), revealing "diseconomies of scale."
Three key factors explain this phenomenon: 1. Heavy reliance on ETFs (77% of 601.2 billion yuan AUM), which generate lower management fees than active products 2. Over-dependence on Central Huijin - the "national team" holds ETFs worth 47% of Huatai-PineBridge's non-monetary AUM as of H1 2025 3. Industry-wide fee cuts - management fees for Huatai-PineBridge CSI 300 ETF (510300) were reduced from 0.50% to 0.15% in November 2024
The fee cuts had immediate impact: despite the CSI 300 ETF's AUM nearly doubling to 362.6 billion yuan in H1 2025, management fees plunged 40% year-over-year to 269 million yuan. This contributed to Huatai-PineBridge's H1 2025 revenue declining 5% YoY to 952 million yuan and net profit crashing 36.16% to 204 million yuan, challenging its scale-dependent business model and raising doubts about sustaining high dividends.
Performance metrics show 68% of Huatai-PineBridge's 96 primary funds lost money from 2022-2024, with 39% underperforming benchmarks. From December 2022 to November 2025, 17% of 117 funds posted losses, while 39% trailed benchmarks.
Market observers criticize excessive dividends for: (1) weakening capital accumulation and risk resilience, (2) demonstrating impatience as long-term capital providers, and (3) creating poor investor experiences during market downturns.
Comments