Updated: 2005-06-29
Bucking growth in a bearish market environment, Everbright Pramerica Fund Management Co Ltd, a joint venture between Everbright Securities and Prudential Financial, plans to launch a new equity fund product in China before October, according to the company's shareholders.
Everbright Securities President Xu Haoming said the new fund, the third for the company, will be an equity index fund designed to closely reflect the equity market's performance.
"We understand in the current lacklustre market environment, distribution work would be difficult. But it would be, on the other hand, good for fund managers' operations," Xu said on Monday.
Established in April 2004, Everbright Pramerica has already launched two fund products in China - one equity fund last August and one money market fund early this month.
"If you look at the short-term performance of China's stock market, it is now in a slump," said Arthur Ryan, chairman and chief executive officer of Prudential Financial.
"But over time, the overall direction of the stock market goes up and that applies to all stock markets around the world." Ryan said his firm always works to serve long-term investors.
Xu said Everbright Pramerica aims to launch a set of complete product lines and product innovation is one of the key areas the company has been focusing on.
With US$496 billion in assets under management, Prudential Financial is a strong global player in life insurance, mutual funds, annuities, pension services, real estate brokerage and asset management.
The US-headquartered company is interested in capitalizing on the opportunities provided by China's strong economic growth, according to Ryan.
It has been reported that Prudential Financial, partnering with US leading private equity firm Carlyle, has secured a deal to pay as much as US$400 million for 24.9 per cent of the China Pacific Life Insurance Co.
But Ryan declined to confirm the agreement, only saying that Prudential Financial aims to enter the China market with organic growth or by strategic investment. "What I say here is that we have very strong interest in China's insurance market."
According to forecasts from Boston Consulting Group, Carlyle and Prudential Financial are bidding to enter a US$52 billion insurance market that may grow by 25 per cent in each of the next five years.
Ryan said Prudential Financial has very strong commitment to the Asia-Pacific market, as has been reflected in Japan and South Korea.
In April 2001, the company completed the acquisition of Kyoei Life Insurance Co Ltd, a financially troubled Japanese life insurer now renamed "The Gibraltar Life Insurance Co Ltd."
The Gibraltar made big progress with total assets reaching US$34 billion as of March 31 this year.
Ryan said China does not represent a significant amount of Prudential assets so far, "nor did Japan ten years ago." But China's growth potential would be huge for Prudential Financial.
