Regulations in China requiring foreign fund managers to form joint ventures with domestic players have deterred United States fund house Janus. Asian regional director Edmund Lacis said Janus, the fifth-largest mutual funds company in the US, had recently set up an Asian headquarters in Hong Kong and was looking to open offices in Taiwan, South Korea, Singapore and Japan. Despite China's commitment to open its fund-management market to foreign participation, Janus would not rush in, because regulations remained tight. 'The China market is a whole different game, because you are talking about setting up a joint venture,' he said. However, after its accession to the World Trade Organisation, China would allow foreign fund managers to hold a one-third stake in mainland companies. The level of permissible foreign participation would be increased to 49 per cent in three years. So far, three international fund management companies have tied up with Chinese companies. US-based Invesco has forged an alliance with Shenzhen's Penghua Fund Management, Fleming Investment Management has tied up with Huaan Fund Management and Britain's Schroder Investment Management has linked with China Asset Management. Janus would monitor the progress of these joint ventures, Mr Lacis said. 'You have got to worry about the joint-venture requirement. I have never seen any successful joint venture in the asset management industry,' he said. 'You want to manage money in a professional fashion, but then you have to team up with a partner who does not and they may want to make their money quickly. I think it is too early days to jump into the China market.' Mr Lacis said he was also concerned about regulations limiting international fund companies to managing Chinese equity funds. This prevented international fund houses from selling their worldwide equities or bond funds to Chinese investors. It restricted local investors' access to many high-growth funds comprising technology and health-care stocks not listed in the Chinese market. Founded in 1969 in Denver, Colorado, Janus had about US$300 billion of assets under its management as at the end of September. It has been expanding internationally during the past two years. Mr Lacis said the ageing population in the US meant its home-market investment base was shrinking. The Asian market was very liquid with many wealthy investors interested in fund products. Mr Lacis said setting up the Hong Kong office last month was part of its expansion plan for Asia, with the Hong Kong office the Asian hub except for Japan. An office to serve Japan will open next year. 'Hong Kong is an ideal location as it is easy to do business here,' he said. Janus last week launched strategic value fund, an equity fund with 70 per cent of assets invested in the US market, and the rest in global equities. Mr Lacis said the local office would support fund houses to create a distribution network for sales of fund products to investors in the region. The Hong Kong office also will be responsible for its dealing of Asian securities including Hong Kong stocks trading. After Hong Kong, Mr Lacis said, it most wanted to go into the Taiwan market, and it was applying to the Taiwanese authorities to operate there.