The Rs 5,000-crore (Rs 50 billion) Bajaj Auto plans to set up an asset management company as a first step towards entering the pension management industry.

The company is also open to the option of acquiring an existing AMC though initially the idea is to use the AMC for advisory services for investment of all three entities--general insurance, life insurance and the pension business.

Bajaj already has insurance ventures with the German giant Allianz AG.

Ghosh, Allianz AG country manager and the CEO of Allianz Bajaj Life Insurance Company told Business Standard that the Bajaj group intends to make fresh investments in existing ventures as well as take at least a 50 per cent stake in the AMC and pension ventures. This rules out reports of Bajaj divesting its stake in the life insurance venture -- Allianz Bajaj Life Company -- where it has 74 per cent stake.

"The two partners put in an additional Rs 50 crore (Rs 500 million) capital into the life JV in December and plans a third investment tranche of Rs 50 crore mid this calendar year," Ghosh pointed out.

The two partners will meet later this month to finalise their plans to set up a pension fund management entity.

"With the pension regulator stating that bids for licence will shortly be opened in the next couple months, the shareholders need to get ready now with their plans," said Ghosh.

While the shareholding pattern cannot be finalised till the regulations are out, the Bajaj-Allianz venture is the second after ING to make concrete plans for the pension business.

"Globally the pension business is doing better than the life insurance business. Lately even Indian joint ventures have found greater business coming from the sale of pension plans," said Ghosh. A team of experts from Allianz Asset Management visited India recently to discuss with the local promoters plans of setting up an AMC.