The insurance, wealth management, and retirement living group Australian Unity Ltd is setting up an overseas joint-venture fund to encourage Australian investors to invest in Asian companies, especially in China.

The unlisted Australian Unity, which has about $7.6 billion under management, announced the establishment of the venture with boutique fund manager Hong Kong-based Seres Asset Management after the group on Thursday booked a fall in annual profit.

Net profit for fiscal 2009 fell to $1.1 million, from $32.3 million in the previous year, after the global financial crisis had a significant impact on its earnings.

Earnings on investments declined and the group earned lower management fees as a result of falls in the value of equities-related funds.

Higher claims in the health insurance businesses also affected its profits.

In the investments business, profit before tax fell to $6.58 million, from $8.06 million in fiscal 2008.

In healthcare, profit before tax fell to $15.89 million from $40.7 million.

Profit before tax from the retirement living business dropped to $10.4 million, from $10.58 million.

The personal financial services business made a pre-tax loss of $8.53 million.

Australian Unity group managing director Rohan Mead said that despite the "significant" fall in net profit, the result was pleasing and evidenced "quite substantial resilience in the company's activities".

Mr Mead said Australian Unity was not focusing solely upon its financial performance. It was also keeping its eye on strategic opportunities thrown up by the global financial crisis.

That included the development of new retirement living accommodation and allied health services at Carlton, in Melbourne; the launch of the preventative health business Remedy Healthcare; Australian Unity's merger with Lifeplan Funds Management in Adelaide; and the formation of Seres.

Mr Mead said the current financial year was already looking preferable to the one just passed.

"We closed the financial year at some $5.8 billion in funds under management in our investments business," he said.

"As at August 31 this year, that funds under management figure, post the transaction with Lifeplan, has risen to $7.6 billion and I'm pleased to say, thanks to strong support from institutional investors, today we're already past the $8 billion mark.

"That's an example of how things have considerably bounced since June 30."

Seres is a joint venture between Australian Unity and Evan Erlanson and Dr Ken Lu.

Australian Unity said Mr Erlanson had more than 13 years of Asian investment experience with Goldman Sachs in Singapore and Bear Stearns Asia in Hong Kong.

Dr Lu is a former fund manager and has had Asian equities research experience with JP Morgan and Credit Suisse.

The head of Australian Unity Investments, David Bryant, said Seres' primary focus would be on China, Taiwan, Hong Kong, Japan, Korea and perhaps India.

Mr Bryant said the fast-growing Asian region probably offered superior opportunities to the United States and Europe.

He said Asian equities were not as risky as some investors may think because Asia had learned its lesson from the Asian currency crisis in 1997 and all the things that had gone wrong in Western countries in the last year such as excessive leverage, lack of transparency, dubious conduct and incorrect government fiscal and monetary policy.

"As a result Asia doesn't carry the degrees of debt or derivative transactions or securitisation that we now know are very opaque investment practices," he said.