StanChart finally sells MF to IDFC for $205 m
Infrastructure Development Finance Company Ltd (IDFC) will buy Standard Chartered Asset Management Company for $205 million (approximately Rs 820 crore). This is before deduction for local taxes and deal expenses. The acquisition will facilitate IDFC’s entry into the retail mutual fund (MF) business.
StanChart has been on the lookout for a prospective buyer for its MF business after the proposed $118-million deal with Swiss banking major UBS fell through in December, owing to a delay in approvals from Indian regulators.
The deal with IDFC has been valued at 70% higher than what UBS was supposed to pay. Sources said other bidders included Credit Suisse, Indiabulls, CLSA, Morgan Stanley, JP Morgan, Goldman Sachs, Lotus India Asset Management, and Macquarie. While the deal is expected to close in the Q2 2008, IDFC will probably re-brand the fund.
StanChart MF is headed by Naval Bir Kumar and has around 100 employees. ?All employees will be absorbed by IDFC,? assured Neeraj Swaroop, regional CEO for India & South Asia at StanChart. Sources said IDFC has already applied to RBI for approval.
However, the transaction does not include StanChart?s mutual fund distribution business. The AMC runs 16 schemes, both debt and equity.
Rajiv Lall, MD & CEO of IDFC, said, ?This AMC is in line with our wider strategy of broadening our footprint in the business and diversifying fee-based revenue streams.? The MF?s average assets stood at Rs 14,141 crore at end-Feb.