The Netherlands-based AEGON Group, one of the world's largest life insurance and pension companies, has agreed to establish an asset management joint venture with Industrial Securities Co, the two companies announced yesterday.

Under the agreement, AEGON will acquire a maximum 49 percent stake in the company, to be called Industrial Fund Management Company. The rest will be held by the Chinese stock brokerage, which is planning a domestic listing by next year.

The deal, which awaits regulatory approval, grants the Dutch company access to China's fast-growing fund management market and paves the way for a foray into the nation's pension market that has yet to fully open up.

China currently has 24 joint-venture fund management companies, including China International Fund Management Co and ICBC Credit Suisse Asset Management Co.

Donald Shepard, chairman and CEO of the executive board of AEGON, said the company anticipates significant opportunities in the nation's fund management market and has been looking for local partners that could provide access.

"We believe there are significant opportunities opening up for the fund management business in China. In the years to come, we believe this will be a key part of AEGON Group's overall strategy," he said.

Figures released by the company suggest that total assets under management reached $110 billion last year on the back of the bullish Chinese stock market, which surged 83 percent from a year earlier.

The Dutch firm has another joint venture set up in 2003 with China National Offshore Oil Corp (CNOOC). It is well-positioned for when regulatory barriers are removed for private institutions to press into the nation's emerging pensions and corporate annuities market.

"We look forward to bringing our expertise in the pension market to China," Shepard said. "For the time being though, there are still steps that have to be taken before there's a fully fledging pension market in China."

Lan Rong, president and CEO of Industrial Securities, said yesterday his company is preparing for a domestic listing, possibly this year or next, either through an initial public offering of shares or via a "back-door" listing through a merger with a company that is already listed.

"We believe that the securities industry and fund management in particular will register a faster growth in China than the bank and insurance industries," he said.

"In order to obtain a larger market share in the growing market it is critical to team up with big and strong international companies to gain global expertise."