CMG Asia has thrust itself into the local pension funds big league with a $90 million takeover of Guardian Assurance's life and pension funds business. CMG, the wholly owned subsidiary of the Australian-based banking and finance group Colonial, said yesterday the merger would make the group the fifth-biggest in Hong Kong pensions administration, with market share of about 5 per cent. It will have $2.37 billion funds under management with a combined premium income of $455 million. Guardian's local operation has more than $1.8 billion in funds under management with policy reserves of $1.3 billion and 269 pension schemes serving more than 11,000 members. The combined operation, which is subject to regulatory approval in Hong Kong and Britain, would be valued at $106 million. CMG Asia managing director Alan Beanland said the move reflected the company's strong commitment to Hong Kong and would help the company to secure its position in a competitive market. The new entity will provide cost benefits through merged products run on a single technology system, as well as cross-selling opportunities. Mr Beanland said CMG would aim at achieving returns of 14 per cent a year from its investments. It would also put the group in a strong position for the Mandatory Provident Fund (MPF) market, which is expected to start in the next two years, he said. Despite concerns about delays in the MPF's implementation, Mr Beanland expressed confidence in the long-term viability of the scheme and said CMG was well placed to play a key role as a service provider. CMG Asia Life Assurance managing director Gary Bennett said research on MPF suggested that firms with a strong presence in the existing pension fund market would be well placed to capitalise on MPF.