Japanese fund manager Nomura Asset Management is set to pick up a stake in LIC MF Asset Management Company which manages LIC Mutual Fund. In a statement issued in Japan, Nomura Asset Management Company, the fund management unit of Nomura Holdings, said it has agreed to invest in an asset management unit of Life Insurance Corporation of India.
Agency reports quoted Riyo Azechi, a spokeswoman for Nomura Asset stating that the Japanese fund manager will work together in India with LIC Mutual Fund Asset Management Company on the asset management business.
Speaking to ET, LIC MF chief executive Sushobhan Sarker said that a memorandum of understanding has been signed with Nomura whereby both companies would look at ways of working together. He said that the outcome of these explorations would decide whether Nomura would pick up a stake in LIC MF or not. A team comprising of officials on both sides would be constituted to take the partnership forward.
LIC Mutual Fund manages over Rs 18,600 crore of assets. Most of the assets are in debt and liquid assets with only around Rs 2,500 crore in equity. The fund has a large investor base of over 4.5 lakh unitholders.
“In the last three years our assets under management have grown 500%. Irrespective of the current talks, we will be taking this growth forward, diversifying products and increasing our investor base,” said Mr Sarker. LIC MF AMC is a three-way joint venture between LIC which holds 49.5% and LIC Housing Finance and GIC Housing which hold 39.2% and 11.2% respectively.
It is not clear whether there would be a stake sale by any of the partners. The paid-up capital of the asset management company currently is Rs 10 crore.
Incidentally, Nomura’s investment bank advised Japanese pharmaceutical company Daiichi Sankyo in its acquisition of Ranbaxy — the biggest acquisition of a listed company in India.
According to agency reports, Nomura Asset chief executive officer Atsushi Yoshikawa said last month that the company was seeking opportunities to form capital alliances with foreign counterparts to grow faster overseas. The Japanese firm last year took a minority stake in Research Affiliate, a US asset management company.
In recent months several public sector mutual funds have sold stake to foreign fund managers. Most recent deals include the partnership between BoB Asset Management and Pioneer Group and Canara Bank Asset Management with Robeco Asset Management. Some years ago Socgen had picked a stake in SBI Mutual Fund.
Source: Economic Times