After the exit of KBC Asset Management, Goldman Sachs and Nomura are the latest foreign partners to leave the Indian mutual fund industry.
Reliance Capital Asset Management is set to acquire Goldman Sachs Asset Management’s (GSAM) onshore business in India for Rs. 243 crore, said a press release issued by the company. The acquisition would add Rs. 7,132 crore to Reliance MF’s kitty. Reliance MF manages Rs. 1.52 lakh crore as on September 2015.
The transaction is expected to be completed by the end of this fiscal year, subject to regulatory approvals. RCAM will extend offers of employment to substantially all of GSAM India’s employees dedicated to supporting the ETF business, the release said.
Reliance is open to acquiring more businesses to strengthen its market share. “The transaction will add over half a percent in our market share. We will ensure that we maintain seamless continuity for all GSAM India fund investors across all schemes. Going forward, we would be willing to consider more such acquisitions that add to our strength and complement our portfolio”, said Sundeep Sikka, CEO, Reliance Capital Asset Management.
“We feel this business is best positioned to achieve long-term success under the direction of an asset manager with an established onshore franchise. We are deeply encouraged by the growing investor demand and Government support for the burgeoning Indian ETF industry”, said Sanjiv Shah, co-Chief Executive Officer, GSAM India.
GSAM currently manages 12 schemes, including 10 ETFs, and is the largest ETF provider in India. It has a total AUM of Rs. 7,132 crore which includes Rs. 2,172 crore in the Central Public Sector Enterprises (CPSE) ETF.
Also, Japanese financial services firm Nomura is looking to sell its stake in LIC Nomura MF, reports ET. Nomura holds 35% in LIC Nomura MF. LIC Housing Finance and LIC of India which hold 20% and 45% respectively, would reportedly buy Nomura’s 35% stake. An email query sent to the fund house remained unanswered.
Recently, Belgium based KBC Asset Management sold its stake in Union KBC Mutual Fund. KBC held 49% stake in the Union KBC MF joint venture.
There has 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.
