Post the acquisition, Principal and Punjab National Bank will hold 70% and 30% stake in the joint venture respectively.
US based investment manager Principal Financial Group has further consolidated its stake in Principal Mutual Fund by buying Vijaya Bank’s 4.03% stake in the asset management company and 5% stake in the trustee company.
Principal has a joint venture with Punjab National Bank and Vijaya Bank since May 2004 to run the mutual fund business in India.
With the completion of acquisition of Vijaya Bank’s stake, Principal and Punjab National Bank have 70% and 30% shareholding in the reconstituted joint venture respectively. Principal’s sponsor Punjab National Bank also holds 18.5% stake in UTI Mutual Fund.
Rajan Ghotgalkar, Country Head, Principal International (India) said on the occasion, “The investment is an important step prior to execution of our recapitalization plans to meet SEBI’s new minimum net worth norms. We are now ready to step up our expansion efforts and the move validates Principal’s belief in the long term growth potential of the Indian mutual fund industry”
Principal Mutual Fund manages Rs. 4,134 crore as on March 2014.
