Allianz Global Investors (AllianzGI), a division of Europe’s largest insurer Allianz, is subscribing to a new share issuance by Guomin Pension, securing a 2% stake in one of China’s leading private pension market players. This strategic move allows AllianzGI to invest in China’s burgeoning private pension sector, marked by a rapidly aging population.

AllianzGI is acquiring 228 million new shares for 284 million yuan (US$39.1 million), Guomin Pension announced on Monday. Established in March 2022 with a registered capital of 11.2 billion yuan, Guomin Pension is piloting personal and commercial pensions in China.

This investment provides AllianzGI, which recently received a wholly foreign-owned public fund management license from Chinese regulators, with a foothold in China’s expanding private pension market. Guomin Pension anticipates that AllianzGI’s international experience will enhance its product design, asset allocation, pension insurance services, and other areas.

“Building our business in China is a long-term strategic priority for AllianzGI,” said Chief Executive Officer Tobias Pross. “Having obtained our FMC licence, we can now commence our public fund management business in this dynamic market, allowing us to begin serving the growing population of retail investors in the country.”

Pross highlighted that China’s trillion-dollar mutual fund market is set for significant growth due to aging demographics, rising household incomes, and ongoing pension reforms. “AllianzGI is well positioned to serve this growing market,” he added.

Founded in 1998, AllianzGI managed assets worth more than 533 billion euros (US$572.5 billion) across over 20 markets worldwide by the end of last year. The Frankfurt-based firm is one of the first overseas investment managers of national social security funds and is a leading foreign asset manager by funds invested in the Chinese mainland capital market.