Ant Group’s Yu’e Bao, formerly the world’s largest money market fund, has seen its assets under management contract significantly in the first quarter of 2021, amidst heightened pressure on the Chinese fintech sector from regulators.
Yu’e Bao’s net assets fell 18.3% in the first quarter to 972.4 billion yuan (approx. USD$149.92 billion) at the end of the quarter, as compared to 1.19 trillion yuan at the end of 2020.
Yu’e Bao is operated by Tianhong Asset Management Co., ltd., which is in turn 51% owned by Ant Group.
First established in 2013, Yu’e Bao emerged as the world’s largest money market fund in terms of assets under management in 2017, leveraging the immense presence of Ant Group’s Alipay in the Chinese payments sector. In March 2018 Yu’e Bao’s assets under management hit USD$268 billion.
The sizeable shrinking of Yu’e Bao arrives during a trying time for Ant Group, which has come under heavy pressure from Chinese regulators since the end of 2020.
China’s financial authorities scuppered the dual listing of Ant Group on the Hong Kong and Shanghai bourses just prior to its scheduled launch in early November, when it was expected to raise a record $37 billion.
Chinese authorities have since summoned Ant Group executives for disciplinary “regulatory discussions” on multiple occasions, where they have reportedly required that Ant Group focus more on its original payments operations, convert into a financial holding company, as well as oust Jack Ma from his position of key ownership and influence.