US-based investment management firm Invesco is buying 49% in Religare Mutual Fund in a deal that marks the re-entry of a foreign partner into the Indian asset management company.
Religare MF was launched as a joint venture between Religare and Aegon, but the Dutch financial services major exited the JV in 2009 by selling its stake to the Indian firm.
While announcing the JV on Thursday, officials from Religare MF and Invesco declined to disclose the deal size. However, industry sources pegged it at Rs 500 crore, valuing Religare MF at close to Rs 1,000 crore – or between 6% and 7% of its Rs 14,600-crore assets under management. When asked about the deal size, Religare MF CEO Saurabh Nanavati said that it was within the range of recent deals in the industry.
In April, Schroders, UK’s largest assets manager, bought a 25% stake in Axis Mutual Fund for an undisclosed sum while in June Japanese life insurance major Nippon Life bought a 26% stake in Reliance Mutual Fund for about $290 million. Last week, industry regulator Sebi cleared the acquisition of Fidelity’s India mutual fund business by L&T Mutual Fund. Here too, the companies did not disclose the deal size.
After the Religare MF-Invesco deal, the fund house will be rechristened Religare Invesco Mutual Fund. Religare MF is an arm of Religare Enterprises – promoted by billionaire brothers Malvinder Singh and Shivinder Singh, the erstwhile promoters of homegrown pharma major Ranbaxy Laboratories.
For Religare MF, one of the main takeaways from the deal is the funds that Invesco’s clients would invest in India, which, in turn, would be managed by the Indian fund house. “With a good three-year performance track record and solid revenue growth, we believe that both our retail and offshore businesses would be propelled to the next level of growth,” said Sachindra Nath, group CEO, Religare Enterprise. For the US-based firm, “this addition will enhance Invesco’s presence in an important and growing market, while providing Religare’s clients access to our broad range of investment solutions,” said Martin L Flanagan, president and CEO, Invesco.
Source: Business Standard