Conning and Cathay Financial Holdings will set up a 50-50 asset management joint venture in Hong Kong to serve institutional clients in the Asia Pacific region.
In a telephone interview, Woody E. Bradford, Conning’s president and COO, said the combination of his firm’s advisory and investment expertise with Cathay Financial’s local knowledge and reputation should prove a powerful one in serving the region’s fast-growing market.
Asia’s more than 500 insurance companies, with combined assets of $5 trillion, will be an immediate business opportunity, while the continued growth of corporate pension funds in the region should provide additional opportunities, said Mr. Bradford, whose firm is one of the largest managers of insurance assets in the U.S.
He noted only 10% of Asian insurance company assets are outsourced to external asset managers, but that trend is accelerating “dramatically,” outpacing the growth in outsourcing being seen in either the U.S. or Europe.
Pending various regulatory approvals, the joint venture should be launched by the first quarter of 2012.
In addition, Cathay Financial will acquire a 9.9% stake in Conning for US$19 million, Mr. Bradford said.
Aquiline Capital Partners bought Conning from Swiss Reinsurance in June 2009, with Aquiline and Conning executives holding equity in the firm following that transaction. Mr. Bradford declined to say how Cathay Financial’s purchase would affect other Conning stakeholders.