The venture will target the financial services, health care and real estate sectors, investing US$65 million in the first stage, Greenberg said.

He said he did not believe China's property market had formed an unsustainable bubble despite rapidly rising prices, as many Chinese still wanted to buy housing.

Greenberg has been a frequent visitor to China and has close ties with officials here. Under his leadership, AIG, now the world's largest insurer, was the first foreign insurance company to obtain its own licence to operate in China.

Last Thursday, Greenberg, who retired from AIG in 2005, made a personal donation to the Special Olympics to be held late this year in Shanghai.

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