Germany's Allianz will take a 51 percent stake in an Indian asset management joint venture with financial services firm Bajaj Finserv as it extends its operations in Asia's third-largest economy.

The German insurer's planned entry comes after a fiscal year when assets under management in India's 35-member mutual fund industry fell as a slowing economy and turbulent financial markets hit investment valuations and detered retail investors.

Allianz joins the likes of South Korea's Mirae Asset and France's Axa who have entered the industry in the last two years. Goldman Sachs has deferred plans to start mutual fund operations in India, and many more are going slow.

"We are delighted to extend our partnership to the mutual fund business, which may take about a year to commence operations," Rahul Bajaj, chairman of Bajaj Finserv said in a statement.

Allianz has minority stakes in two Indian insurance ventures, Bajaj Allianz Life Insurance Co Ltd and Bajaj Allianz General Insurance Co Ltd, and had told Reuters last August it was in talks with the Bajaj Group for an asset management venture.

India's mutual funds industry managed about $83 billion at the end of 2008/09 fiscal year in March, down from more than $100 billion a year earlier, data from the Association of Mutual Funds in India showed.

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