AMP will hold a 15% stake in the joint venture with the rest owned by China Life Asset Management, according to a statement filed by the Australian company with the Australian Securities Exchange.
The JV will be called China Life AMP Asset Management, and will offer investment in domestic listed equities and fixed income to both retail and institutional investors in China.
The new asset manager has received regulatory permission from the China Insurance Regulatory Commission, but awaits a nod from the China Securities Regulatory Commission.
This is the first joint venture since the regulators on 21 June allowed Chinese insurers to set up asset management companies, offering financial institutions more scope to participate in a wider range of sectors.
The new reforms are likely to provide investors easier access through new distribution channels and offer innovative solutions to meet the needs of China’s growing savings market.
According to Craig Dunn, chief executive of AMP, China, is an important part of the company’s growth strategy, a strategy that focuses on expanding internationally through its fund management business.
“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 fasted growing major economy,” Dunn said.
AMP Capital expects the total size of China’s assets under management industry to rise to A$2.08trn ($1.8trn, £1.2trn, €1.4trn) in 2013 and grow by 15% to A$1.5trn in 2017.
“China Life Asset Management brings a strong brand and leading market position, significant distribution capability, and deep understanding of customer needs in a dynamic market to the joint venture,” said AMP Capital chief executive Stephen Dunne.
AMP Capital will share its expertise in product development, risk management, governance, investment and research through the joint venture, Dunne added.
AMP Capital offers investment solutions for global pension funds, institutional and retail investors across asset classes such as real estate, infrastructure, equities, and fix the country’s largest insurance company in 2006 by cooperating in qualified foreign institutional investor investments.
In 2009, both companies entered in a strategic cooperation agreement for fund management and pensions business.
China Life Insurance is the world’s largest company by market capitalization with over 693,000 agents. The largest Chinese insurer manages assets over A$345bn.
AMP, the country’s largest retail and corporate pension provider, with assets worth A$130bn as of March-end would now operate in three countries – Australia, Japan, and China.