Allianz fund arm's Indian joint venture to start by end of 2010

The funds arm of German insurer Allianz, expects its Indian joint venture to start operations by year-end, and to score an advantage over rivals who were quicker to enter the much-touted market, its CEO said.                                           

Allianz Global Investors (AGI) chief executive Joachim Faber said the venture with the financial services arm of the Bajaj Group is currently in the process of obtaining regulatory approvals.    

"India is our new focus market. We are already in China, Korea, Taiwan, Hong Kong, Singapore -- so India is the next one," he told Reuters.                                           

"We should be up and running towards the end of the year."      

Faber conceded AGI was playing catch-up in India with peers like JPMorgan, State Street Global Advisors and the fund business of France's Axa but said the delay had allowed it to avoid a costly response to new regulatory rules imposed by the Indian government.                                           

Last year, the country's stock market regulator said it would abolish front-end or entry fees charged by mutual funds in a move aimed at cutting costs for investors and discouraging aggressive selling.                                           

"We were perhaps a little late in getting into the Indian market, but this has not been bad for us. Those who came in strong in the last five years are suffering losses because of  some of these (regulatory) changes. So this is a very good time to get into the market," he said.                                           

Faber also said that while the fund management industry was likely to see increased consolidation, AGI itself would continue to be opportunistic rather than aggressive in seeking acquisitions.  

"We are really looking at generic growth. If the right opportunity comes along, we are not completely averse to it, but we are not actively seeking acquisitions," he said.                                           

Speaking to Reuters on Monday, AGI chief operating officer Marna Whittington noted that alternative investments like hedge funds were one area where AGI was considered to be lacking exposure and where any acquisition interest might fall.                             

AGI, which is one of the world's top five fund managers with assets under management of over one trillion euros, has reported a 51% rise in operating profits to €1.3 billion in 2009. It operates a multi-boutique structure which includes fixed income specialist PIMCO, equity specialist RCM and other semi-autonomous divisions like Nicholas Applegate.