Sundaram Mutual Fund has announced acquisition of Principal Mutual Fund. With this, Sundaram will acquire the schemes managed by Principal MF and acquire 100% of the share capital of Principal AMC and Principal Retirement Advisors.
The transaction is subject to regulatory approvals. Till then, Principal MF will continue to operate the businesses until the deal is closed.
Currently, Sundaram MF manages assets of over Rs. 40,000 crores, the majority of which is in equity oriented schemes. Principal MF has AUM of Rs. 7,447 crores as on December 31, 2020 with about 90% of this in equity-oriented schemes. With this, Sundaram Mutual Fund will become the 15th largest AMC in the industry by overtaking Edelweiss AMC and Invesco AMC.
In a press release, Sunil Subramaniam, Managing Director, Sundaram MF said, “This transaction will strengthen our presence in the marketplace with the addition of a range of schemes with a good long term performance track record across the large and mid-cap segments. This will complement our business which has traditionally been weighted towards the mid- and small-cap segment.”
Pedro Borda, chief operating officer, Principal International said, “As part of a systematic review of the company’s portfolio of businesses and global market dynamics, we’ve made the decision to exit the asset management business in India. As we transition the business, customers and distributors will remain our top priority. We believe they will benefit from Sundaram Asset Management’s larger mutual fund platform in this market.”
T.T. Srinivasaraghavan, Managing Director of Sundaram Finance added, “This acquisition is a natural step in our aspiration to become a sizeable player in the asset management industry. We will be able to leverage the combined platform to derive significant synergies. The focus for us will be on delivering a better experience to our investors and distribution partners.”
