Prudential Asset Management, the Asian arm of UK insurer Prudential Plc, and Bank AlJazira have received regulatory approval to set up a fund management joint venture in Saudi Arabia.

The new company, Jedda-based Prudential Jazira Asset Management, has been authorised by Saudi ArabiaÆs Capital Market Authority to manage, advise and undertake custody services in the securities business. A spokesman for Prudential Asset Management could not immediately disclose the initial capital of the JV and the stakes held by each party.

The JV is part of Prudential Asset ManagementÆs expansion plan in the Gulf region and other emerging markets outside of Asia. The company opened its first Middle East office in Dubai in October 2006.

Prudential Asset Management has around $74 billion in assets under management and has operations in 10 markets in Asia and the Middle East. The companyÆs presence in Asia began in 1997 when it formed a fund management JV with IndiaÆs ICICI Bank.

Bank AlJazira, meanwhile, is one of the leading Islamic financial institutions in Saudi Arabia that mainly serves affluent individuals and corporations in the region.

With a GDP of $345 billion, Saudi Arabia is the largest economy in the Gulf Cooperation Council region and has the largest stockmarket in terms of capitalisation, notes Suraj Mishra, CEO and Middle East and regional head for fund management sales and distribution at Prudential Corporation Asia.

Saudi Arabia has ôshown impressive economic growth over the last few years and we believe now is the right time for us to establish operations in this attractive and rapidly growing sharia marketö, Mishra says.

Prudential and Bank AlJazira also intend to launch a joint venture takaful (Islamic insurance) business in Saudi Arabia. Bank AlJaziraÆs existing takaful business, which will become part of the joint venture, is already a leading takaful provider in Saudi Arabia.

Prudential and Bank AlJazira signed a memorandum of understanding for the takaful business last year. Previously, Prudential said that deal would be with AlJaziraÆs life insurance business, Takaful Taawuni, which will set up a JV company with Prudential as the largest shareholder.