National Mutual Asia, keen to win a licence to sell insurance in China, is launching a US$500 million fund to invest in consumer-driven companies on the mainland and elsewhere in Asia. The company, an affiliate of French insurance giant Axa, has provided the Axa National Mutual China Asia Number One Fund with initial capital of $125 million and hopes to raise a further $375 million from institutional investors. National Mutual chief executive Terry Smith, acknowledged the fund launch was part of a larger campaign of lobbying to be given a licence to sell insurance in the potentially huge mainland market. 'I hope that we've demonstrated over the past few years that we will be a good corporate citizen if given a licence to operate in China. I think that such a large investment - an amount up to $500 million - is an indication of commitment to China,' he said yesterday. Aside from winning points towards an insurance licence, the fund carried another hefty incentive, Mr Smith said - it was expected to yield 30 per cent annually for 10 years. Donaldson Lufkin & Jenrette (DLJ), Axa's investment banking subsidiary, will launch the fund in the final quarter of this year and begin investing in high-growth, medium-sized companies shortly thereafter. DLJ Asia executive director Bernard Teh said the fund would target consumer-driven companies, starting with food and beverage and retail enterprises and would branch out into distribution companies, pharmaceutical makers and car and car-part manufacturers. He said many investments were under consideration but none was near completion. He offered no target date by which the initial $125 million would be invested. Mr Smith also did not say when the $375 million would be raised. He did say the fund's investments would average $10 million to $15 million in size and would aim to provide the final boost needed before target companies listed themselves publicly. National Mutual, which has representative offices in Beijing, Guangzhou and Shanghai, hoped to open three more mainland offices soon, he said. China has so far granted licences to two foreign insurance companies - American International Group for life insurance products and Tokio Fire and Marine Insurance for general insurance products - and must continue to open its market to gain entry to the World Trade Organisation. The pace of the opening is difficult to gauge, however. 'It is absolutely impossible to judge whether a licence will be available to us in five months or 55 years. It's completely outside of our power,' Mr Smith said. About 80 companies are vying to enter the Chinese market. If National Mutual gets permission to sell insurance in China, it will probably do so through a joint venture with China Everbright International, a state-owned investment and trading company that owns 5 per cent of National Mutual.