ANZ and ING have officially formed their funds management and life insurance joint venture which will see ING take over management of the bank's funds.

ING will take a 51% stake in the venture and ANZ 49%. Combined it will become the fourth largest player in Australia and the largest retail fund manager in New Zealand with total funds under management of $2.8 billion.

The joint venture starts at the beginning of next month and will be headed up in New Zealand by ING managing director Paul Fyfe.

Under the deal funds formerly managed by ANZ Funds Management will be delegated to ING.

It is unclear in New Zealand what will happen to ANZ's alliance with Frank Russell and ING's arrangement to manage money for WestpacTrust.

Currently ANZ promotes a multi-manager Frank Russell product to its customers and ING has an arrangement where it manages all WestpacTrust's managed funds with the exception of its mortgage fund.

ING Australia will combine ING's retail fund management and life insurance businesses and most of its distribution in Australia and New Zealand with ANZ's life insurance and fund businesses.

The deal has been driven out of Australia where ANZ was keen to grow its funds management business. ING's strategy globally has been to pair with local banks to access distribution.

Fyfe has assured people that the new business will "undertake a well-planned and well-resourced integration programme.

"We shall remain focussed on maintaining a quality service."
Likewise he told advisers that "our existing support programme and commitment to external distribution, financial advisers and adviser networks will remain a top priority for the joint venture."

The deal does not include ING's Australian general insurance interests, ING Investment Management, ING Real Estate, and ING's wholesale, investment banking and retail banking operations, including ING Direct.

It also does not involve ANZ's distribution businesses and financial planners, nor ANZ Trustees and Lenders Mortgage Insurance.