L&T Finance (LTF), a subsidiary of L&T Finance Holdings Ltd (LTFH), has executed definitive agreements to acquire FIL Fund Management Pvt Ltd (Fidelity AMC) & FIL Trustee Company Pvt Ltd, the companies carrying on the mutual fund business of Fidelity in India, subject to regulatory approvals.
Fidelity AMC, incorporated in 2004, manages the 15th largest mutual fund in India with a market share of 1.3% and an average AUM for the quarter ended December 2011 of Rs8,881 crore (about 68% of its assets are equity oriented). It has built a robust equity oriented franchise which has access to large HNI customers and a strong SIP portfolio. Its equity assets are the tenth largest in India with a market share of 3.1%. Further, in the past 3 years, the fund performance has resulted in 4 of its 5 equity funds being ranked amongst top 10 in their respective category.
YM Deosthalee, CMD of LTFH, said, “This acquisition provides L&T Mutual Fund the necessary scale, products and access to retail customers to grow profitably.”
“The strong equity-focus of Fidelity’s Indian Mutual Fund, when combined with L&T Mutual Fund, results in a balanced asset base. The size of the combined entity (average AUM of about Rs13,497 crore for the quarter ended December 2011, with a market share of about 2.0%) together with the backing of the ”L&T” brand would provide an optimal platform to improve margins and grow profitably. Together, the complementary skill sets, distribution reach and client base present a well balanced overall picture,” said N Sivaraman, president & whole-time director, LTFH. Lazard was the financial advisor to L&T Finance in the transaction.
In the early afternoon, Larsen & Toubro was trading at around Rs1,312 per share on the Bombay Stock Exchange, 0.68% up from the previous close.
Source: Money Life