M&M Finance sells 49% in AMC arm to Canada firm for $35 million

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Mumbai | Published: June 22, 2019 12:43:17 AM

Mahindra & Mahindra Finance on Friday said its asset management arm had entered into an agreement with Canada-based investment firm Manulife to divest a 49% stake in its asset management arm for a consideration of $35 million.

On the liquidity situation, Iyer said Mahindra Finance is not finding any pressure as of now.

Mahindra & Mahindra Finance on Friday said its asset management arm had entered into an agreement with Canada-based investment firm Manulife to divest a 49% stake in its asset management arm for a consideration of $35 million.

Mahindra Asset Management will own 51% of the venture. The Canadian firm’s stake is valued at $35 million, which will in turn value Mahindra AMC at nearly $70 million. “The investment by Manulife will directly go the our asset management arm which will help us boost the retail outreach in our AMC business,” said Ramesh Iyer, VC & MD, Mahindra Finance.

Mahindra AMC’s assets under management (AUM) amounted to Rs 5,000 crore, of which Rs 3,000 crore comes from institutional investors. The management feels they have enough scope to build its retail book. “Currently, our market share in the mutual fund business is nearly 4% and we look to grow and add new segment of investors,” said Ashutosh Bishnoi, MD & CEO, Mahindra AMC.

On the liquidity situation, Iyer said Mahindra Finance is not finding any pressure as of now. “Look at our balance sheet, we have an excellent ALM match. So we don’t have any liquidity pressure in the sense of our ability to raise funds,” he said.

Iyer said they source funds from multiple avenues such as banks, mutual funds, insurance companies, provident and pension funds and through securitisation and do not “depend on any one source has been a good strategy”.

Manulife operates in Asia, Canada and the US, with the company being the market leader in Hong-kKng and the second-largest player in Indonesia with an AUM of over $849 billion. “We desire to be one of the top-tier mutual funds in India,” said Michael Dommermuth, head of Manulife Asia. “We have strong presence in Asia and India has the fastest-growing mutual fund industry in all of Asia. This led us into this strategic partnership,” Dommermuth said.

(With PTI inputs)

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