PineBridge Investments and Farallon Capital Management have joined the list of foreign fund houses looking to enter the Indonesian market via the purchase of a local asset manager, sources say.

The two US-based firms have agreed to acquire AAA Asset Management, which targets institutional and high-net-worth investors (HNWIs). A source familiar with the deal confirmed this and said the acquisition is now awaiting regulatory approval. AAA’s vice chief executive, Adrian Panggabean, declined to comment.

The source declined to reveal what proportion of AAA the two firms will each own, but said the move could see the local manager target the conventional mutual fund business due to its strong growth potential.

Retail mutual fund penetration is still low in Indonesia, with only some 250,000 of a population of 250 million owning these products. Industry AUM stands at Rp226 trillion ($21 billion).

PineBridge declined to comment, but a source close to the firm said it is looking to expand its footprint in the region. It already has offices in Hong Kong, Malaysia, Melbourne, Mumbai, Seoul, Shanghai, Singapore, Taiwan and Tokyo.

San Francisco-based Farallon is an institutionally focused manager with five core investment strategies in credit investments, long/short, merger arbitrage, real estate and direct investment. It has Asian offices in Hong Kong, Singapore and Tokyo. The firm’s Singapore-based managing director, Vikram Bagaria, declined to comment.

Indonesia has been attracting growing interest from foreign fund managers. The approach favoured by the Indonesian markets regulator OJK is to let overseas firms acquire existing licences of small-scale local managers in a bid to help consolidate what is a fragmented market.

International fund houses to have done so in recent years include UK-based Aberdeen Asset Management, which acquired 80% of NISP Asset Management last year, as reported; UK-based Ashmore, which bought an 85% share in Indonesian fund house Buana Megah Abadi in 2013; and Eastspring Investments, which gained a local licence in 2012 and hired a 20-strong team on the ground.

US firm JP Morgan AM was also exploring options in Indonesia last year as part of its mutual fund business expansion. But a spokeswoman said the firm hasn’t set up an Indonesian office yet.

Denny Thaher, chairman of Indonesia’s Association of Mutual Fund Managers, confirmed that several international managers have contacted the association to explore opportunities in the market, but he declined to name them.

The market has become more attractive over the past year thanks to reforms proposed by newly elected president Joko Widodo, including a planned tax amnesty aimed at bringing home wealthy Indonesians’ offshore funds, as reported.

The number of rich Indonesians is also growing. According to Capgemini and RBC Wealth Management’s World Wealth Report 2014, the number of Indonesian HNWIs rose 7.5% in 2013 to 40,000 people, with a combined wealth of $134 billion.

PineBridge is a global asset manager with nearly 60 years of experience in emerging and developed markets using alpha-oriented strategies across asset allocation, equities, fixed income and alternatives.

The firm is majority-owned by Pacific Century Group, the investment firm run by the Hong Kong billionaire Richard Li, son of Li Ka-shing. It was peviously the investment arm of AIG and was sold to Pacific Century in 2010.

PineBridge managed $70.8 billion as of September 30, 2014. It came in at number 62 in AsianInvestor’s 2014 Asia-Pacific rankings of the top managers by Asia-Pacific AUM with $33.2 billion, up 16.9% from $28.4 billion in 2013.

AAA AM is a member of the AAA Group, set up in 1995 as a financial advisory company. It expanded and set up a securities firm in 1998. AAA AM was the fund management arm of the securities firm, but spun off in 2012 to manage institutional and HNWI money through mutual and special-purpose funds.