China Life in Funds Management Venture With AMP Capital

China Life Insurance Co. (2628), the nation’s largest insurer, and a unit of Australia’s AMP Ltd. (AMP) formed a funds management joint venture targeting Chinese retail and institutional investors.

AMP Capital, which managed A$130 billion ($116 billion) as at March 31, will invest A$15 million for a 15 percent stake in China Life AMP Asset Management Co., Anthony Fasso, international head of AMP Capital’s global clients division, said in a telephone interview from Melbourne today.

The value of assets managed by Chinese mutual funds is expected to reach A$800 billion in 2013 and touch A$1.5 trillion by 2017, AMP said in a statement through the stock exchange today. The joint venture takes advantage of regulations that came into effect June 21 that allow insurance companies in China to start mutual funds for retail and institutional investors, AMP said.

“A funds management joint venture in China is a strategically significant move for AMP, giving us direct access to the world’s second-largest and fastest-growing major economy,” AMP Chief Executive Officer Craig Dunn said in today’s statement.

The joint venture, which has received approval from the China Insurance Regulatory Commission, will be China Life’s first in mainland China with a foreign partner in funds management, AMP said. It expects to introduce the first product in China in about six months after it gains the approval of China Securities Regulatory Commission, Fasso said.

Technical Support

“AMP’s support will be technical in nature,” he said. “Technical support around product development, governance, risk and investment management processes.”

AMP has had a presence in China since 1997 and worked with China Life for almost eight years. The two entered into a memorandum of understanding to explore partnerships in funds management and pensions in 2009.

A unit of Mitsubishi UFJ Financial Group Inc. (8306) owns a 15 percent stake in AMP Capital. It agreed to buy the stake in 2011 and to sell its products in Japan, the world’s second-biggest savings market.

To contact the reporter on this story: Narayanan Somasundaram in Sydney at nsomasundara@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

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