Belgium based KBC Asset Management, the foreign partner of Union KBC MF is the latest foreign fund house to exit the Indian MF industry.
KBC holds 49% stake in the Union KBC MF joint venture. State run Union Bank, which holds the majority 51% stake in the fund house, announced that it will buy out 49% stake from KBC. The transaction is subject to regulatory approval in India.
Union KBC started operations in 2011 and has built an AUM of Rs. 2,672 crore as on September 2015.
A release put out jointly by KBC and Union Bank of India hints at the ‘altered market developments’ in India for KBC’s exit. “KBC and Union Bank of India have always stated their firm belief in the potential of the Indian market for investment funds. Nevertheless, market developments in India have altered the financial landscape in which the joint venture was established. KBC, together with Union Bank of India and in close collaboration with the joint venture’s management, has discussed all possible options with a view to finding a solution which addresses the concerns of all stakeholders,” states the release.
Meanwhile, the management and staff of the joint venture will continue to actively perform their functions and develop their business under the ownership of Union Bank of India, stated the release.
There have been a spate of exits by foreign fund houses, with three foreign AMCs – Morgan Stanley, ING, PineBridge exiting India in 2014. The most recent exit was of Deutsche MF which sold its schemes to Pramerica.
Distributors say that Union KBC can sail smoothly after the exit of KBC as it can bank on its sponsor’s wide branch network to grow its assets.
