(Bloomberg) -- Principal Financial Group Inc. is considering selling its pension fund business in Hong Kong, people familiar with the matter said, a move that would help the US financial services firm streamline its portfolio.

The company is working with an adviser to sound out preliminary interest in the assets, the people said, asking not to be identified because the matter is private. A sale could fetch a few hundred million dollars, and attract interest from insurers and banks seeking to expand in the Asian financial hub, the people said.

Deliberations are at an early stage, no final decisions have been made and Principal could still decide against pursuing a deal, the people said. A representative for Principal declined to comment.

Hong Kong’s so-called mandatory provident funds system lost about HK$176.8 billion ($22.5 billion) in the year to the end of August, walloped by China’s industry crackdowns and Covid Zero policy, according to researcher MPF Ratings Ltd. Chinese and local equities are the biggest asset class in the MPF system.   

Principal, based in Des Moines, Iowa, traces its roots back more than 140 years and counts about $632 billion in assets under management as of the end of June, according to a recent press release. It offers retirement, insurance and asset management services to more than 54 million customers globally.

The firm set up its Hong Kong operations in 1996, providing both investment and retirement services to businesses, individuals and institutional investors. It has the seventh biggest market share among pension fund managers in Hong Kong with a 5.8% share as of the end of March, according to advisory firm WTW. Principal ranks behind firms in the survey including Manulife Financial Corp., HSBC Holdings Plc, Sun Life Financial Inc. and AIA Group Ltd., which have 65% of market share in total.

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