Morley and COFCO sign deal on China fund venture

SHANGHAI, April 9 (Reuters) - Morley, the fund management arm of Aviva plc (AV.L: Quote, Profile, Research, Stock Buzz), Britain's biggest insurer, said on Wednesday it has signed an agreement with two Chinese firms, including COFCO, to set up a joint venture fund house in China.

An agreement on the deal was inked in Beijing this month with China National Oils, Foodstuffs and Cereals Corp (COFCO) and a trust firm based in the southern Chinese city of Dongguan, the statement said.

No details about the planned joint venture were disclosed.

Morley, which opened a representative office in Shanghai last year, has said it planned to use the joint venture to develop a major business in China, where the asset management sector has grown rapidly, thanks to the booming Chinese economy.

China's 10-year-old mutual fund industry had about 3.2 trillion yuan in assets under management at the end of 2007, following explosive growth over the past two years as investors piled into the sector while the stock market boomed.

There were 59 mutual fund management companies and 368 mutual fund products in mainland China at the end of last year, according to China's Essence Securities.

Morley also said it was currently applying for a Qualified Foreign Institutional Investor (QFII) licence to allow it to purchase stocks and bonds traded in mainland China.

Aviva has had a life insurance joint venture with COFCO since 2003, which is ranked fourth in premium terms among foreign joint venture life insurers in the country. (Reporting by David Lin; Editing by Ken Wills)