Prudential to set up India fund venture

By Kim Yeon-hee and Lee Eun-yul

SEOUL (Reuters) - U.S life insurer Prudential Financial Inc. (PRU.N) is in the final stages of picking an Indian company to form an asset management joint venture to break into the market, an executive said on Wednesday.

If it goes ahead, the venture will be its fifth Asian unit after Japan, South Korea, China and Taiwan, and will join other insurers that have been ramping up operations in India.

"We are in the process of finalizing an arrangement for a partner on the asset management side," said Christopher Cooper, who leads the No. 2 U.S. life insurer's investment group in Asia.

"It is of a pretty good size and has a good reputation," he told Reuters in an interview. He declined to identify it.

Prudential expects the venture to help it save time in building distribution channels and brand recognition in the competitive market, as well as deal with cultural and regulatory issues.

"We are hoping to announce a partner within this year," said Cooper, who is based in Seoul.

Excluding India, Prudential is not currently seeking to launch other new companies in Asia.

It runs a small joint venture with China Everbright Group for asset management in China and wants to strengthen the relationships, Cooper said.

FOCUS

New Jersey-based Prudential, with $630 billion of assets under management, plans to boost retail fund sales in South Korea and Taiwan, but will focus on institutional fund business in Japan after facing tough competition in that country's retail fund market.

"Our ambitions is to be the number one retail manager (in South Korea)... Anything that we are doing in Japan will be fairly slow," he said.

Prudential is the biggest foreign asset manager in South Korea by assets, overseeing 8.3 trillion won ($9 billion) at the end of March, and its products range from U.S. high-yield funds to global real estate securities to China funds.

It bought 80 percent of the former Hyundai Investment and Securities Co. Ltd. and its subsidiary Hyundai Investment Trust Management Co. Ltd. in 2004 for 355.5 billion won from the government. Cooper spearheaded the acquisitions.

The U.S. insurance group now wants to buy back a 20 percent stake in the brokerage unit from a state-run agency, exercising its call option.

Prudential had also reportedly tried to buy small fund manager Landmark Investment Management in South Korea from Morgan Stanley's (MS.N) private equity fund. Dutch financial firm ING Group (ING.AS) (ING.N) bought Landmark in June.