German insurance giant Allianz is carrying out discussions with banks in China to establish a majority-owned asset management joint venture (JV) in the country, Reuters has reported.

With the proposed JV, the company seeks to tap the Chines wealth market, which is estimated to be valued at $4.3 trillion, stated the news agency citing sources familiar with the matter.

According to the sources, Allianz Global Investors (AllianzGI), primary asset management division of Allianz, has been negotiating with Industrial Bank and China CITIC Bank and others for setting up the JV in the last few months.

With the move, AllianzGI has joined the fray with the overseas asset managers who are looking to invest in the attractive wealth management industry in China.

In 2019, China gave permission to foreign firms to form majority-owned wealth management JV with the local banks wealth management arms.

Following this, various companies including BlackRock, Goldman Sachs and Barclays have either initiated the process or are exploring options to find local allies to enter the Chinese wealth market.

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By GlobalData

However, there is a looming uncertainty on the availability of appropriate local partners for asset managers to form alliance.

A source was quoted by Reuters as saying: “The competition to win over a local bank intensified this year as not many large banks are left for foreign firms to grab.”

The source further noted that apart from Allianz at least one other overseas asset manager is having discissions with CITIC Bank for setting up a JV.

AllianzGI, which has confirmed its committed to the Chinese market, refused to make any comments regarding the matter. Industrial Bank’s news department representative also expressed inability to provide any information.

Currently, Allianz owns a 49% stake in a fund management JV, which the firm jointly owns with China Pacific Insurance.

The German insurer intends to form a separate wholly owned unit after it failed to fully takeover the JV partner, stated the source.

In June this year, AllianzGI entered into a definitive agreement with Voya Financial to transfer some investment teams and assets that include majority of its US business to Voya Investment Management (Voya IM).