While foreign players have exited the asset management business in India, US-based fund house Invesco has decided to buy the entire shareholding of co-sponsor Religare Enterprises.
Currently Invesco holds 49% in Religare Invesco Mutual Fund, and manages assets worth over Rs 21,000 crore.
Though valuations of the deal were not disclosed, officials in the mutual fund industry have pegged the deal at Rs 500-700 crore. This might be 2.5%-3.5% of the assets held by Religare Invesco Mutual Fund. The transaction is subject to regulatory approvals of the government.
Andrew Lo, senior managing director and head of Asia Pacific for Invesco, said: “We are very excited about long-term prospects of the Indian market. Religare Invesco’s management team understands the dynamics of this complex yet vibrant market. By taking full ownership of this business, we will further deepen our presence in India and enhance our ability to meet client needs across the world.”
Senior officials in the fund house also added that the existing senior management will continue to manage the money for the fund house.
In March 2013, Invesco had bought a 49% stake in the fund house for over Rs 450-500 crore. In the last few months, foreign players like Goldman Sachs Asset Management and Deutsche Asset Management Company sold their stake to Indian players. In the first week of October, Belgium-based KBC Asset Management also sold its 49% stake in mutual fund business to its partner Union Bank of India.
“When several foreign players have been exiting India, it is quite surprising that Invesco wants to own a fund house. Many equity funds of Religare Invesco have performed quite well in the last few years. Now it remains to be seen how they will expand their network in such competitive market,” said a CEO of another leading fund house.
As on September, total assets under management of Religare Invesco Mutual fund stood at R21,593.51 crore. “Invesco’s decision is not just an endorsement of the Indian macros but also the overall quality of the management team, as well as the disciplined path they have diligently followed over the years. We have had a great partnership with Invesco and wish them the very best for the future,” Religare group CEO Sachindra Nath, said.
In a filing to the BSE, Religare said Saurabh Nanavati would continue as the CEO.