Religare plans to launch overseas feeder funds and explore opportunities to attract QFI investments with the help of its foreign partner.
Religare Mutual Fund today announced that global asset management company Invesco Ltd has entered into an agreement to buy 49% stake in its AMC. According to a source close to the development, the deal is roughly pegged at 6 % -7 % of its assets, in line with the recent deals struck in the industry.
“This addition will enhance Invesco’s presence in an important and growing market, while providing Religare’s clients access to our broad range of investment solutions,” said Martin L. Flanagan, President and CEO of Invesco Ltd.
Invesco is present in 20 countries and manages $669.7 billion as on September 2012, with 60% of assets in retail. In the Asia Pacific region, Invesco is present in countries like Australia, China, Hong Kong, Japan and Taiwan.
Religare AMC manages Rs 10,958 crore as on June 2012, with 85% of assets in debt and rest in equity and balanced funds.
Religare has 26 schemes (13 equity, 2 hybrid, 2 ETF, 8 debt funds, and 1 gold fund) under its bouquet. Once the deal is approved by SEBI, Religare AMC will launch overseas feeder funds and focus on attracting QFI investments with the help of its new foreign partner.
The stake sale will result in change in the brand name of the company to Religare Invesco Asset Magement Company Ltd. The joint venture will be headed by Saurabh Nanavati, CEO, Religare AMC along with the existing team.
Religare AMC entered the industry by buying Lotus Asset Management in 2008. It achieved break even in the third year of its operations by posting Rs 31.60 lakh net profit in FY12.
J P Morgan was the sole advisor to this deal.
Despite domestic headwinds, overseas AMCs look keen to get a pie of the Indian asset management industry. In the recent past, Schroders had picked up 25% stake in Axis AMC while Nippon bought 26% stake in Reliance AMC. Last year, Goldman Sachs acquired ETF player Benchmark Mutual Fund while Natixis took up a 25% stake in IDFC MF.
