Pioneer Investments has made a second entry into the Indian mutual funds (MF) market by picking up 51% in BOB MF for an undisclosed sum. BOB MF will henceforth be known as Baroda Pioneer AMC.
Sources familiar with the deal said, ?The usual industry practice of 4-5% of the total asset under management (AUM) formula was not used for this deal as the amount would have been very small. Instead, BOB MF may have got a premium of around Rs 30 to Rs 35 crore for this pact.?
BOB MF, the AUM of which was Rs 101 crore at the end of September, ranks 31 among the 32 asset management companies (AMC) in India. Industry experts say that it makes sense for foreign AMCs to pick stakes in existing ones as they already have a structure in place.
Anil Khandelwal, CMD of Bank of Baroda, said, ?The venture will be jointly branded, and initially, the business will create locally-domiciled MFs for the domestic market. Later, Indian products may be in the group?s main offshore international funds umbrella, which is distributed throughout the world.?
Pioneer Investments provides a wide range of investment solutions, including MFs, alternative investments and structured products. It manages assets worth of $229.4 billion as on August 31 and is headquartered in Milan, Italy.
Pioneer Global Asset Management Company had tied up with the H C Kothari Group in 1993 to form Kothari Pioneer MF.