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SCMP Reporter

PRUDENTIAL Asia plans to set up a fund management arm in Hong Kong as part of a global expansion by its parent, Prudential Insurance Co of America.

  The investment bank, which linked up with DBS of Singapore last year in a strategic joint venture, is also planning a major announcement on venture capital funds in Asia.

  At the new fund group, private portfolios, sourced mainly from North America with a minimum size of between US$5 million and $10 million, will be the main operational business.

  Chairman Victor Fung Kwok-king said: 'The establishment of the fund arm is part of a global programme by our parent.'   The operation will be led by David Descalzi of Prudential Insurance.

   Fund management style at the group will be a highly disciplined regime, taking in a number of areas of expertise, including quantitative analysis.

  Prudential Asia is the investment and merchant banking arm of Prudential Insurance, set up in 1986 with regional operations in Japan, Taiwan, Hong Kong, Thailand, Malaysia, Singapore and Indonesia.

  Through Prudential Asset Management Asia the group has focused on private equity investment.

  The group has been involved in about 70 deals with an investment, by Prudential Asia, of between $420 million and $450 million of a $500 million venture capital fund provided by the parent.

  Public equity investment will be handled by the fund management arm and corporate finance is linked to the strategic venture with DBS Bank.

    'We focus on the budding conglomerates of the region which have outgrown their national borders and are looking to expand,' Mr Fung said.

         Prudential Asia managing director Agnes Wong said the estimated size of the Asian venture capital market was about $3.5 billion, of which $1.4 billion was linked to China.

  Overall, the group sees about 100 potential deals a year.



Prudential to set up fund division