Kotak AMC buys PineBridge Mutual Fund
Kotak AMC buys PineBridge Mutual Fund
PineBridge MF had assets under management (AUM) of just Rs 660 crore. The deal marks third exit of a foreign fund houses in less than a year and underscores challenging conditions for smaller players.
In previous nine months, Morgan Stanley has sold off domestic mutual fund business to HDFC AMC and ING MF was acquired by Birla Sun Life AMC.
In a statement, Kotak AMC said it has executed definitive agreement to acquire the domestic schemes of PineBridge MF.
The exact deal size could not be ascertained, but industry players pegged the transaction value to be lower than recent acquisitions, which were struck between 4% and 6% of total asset size of the fund house.
"We have agreed to acquire the schemes of PineBridge MF. The assets included are equity-oriented which provides a further enrichment to our equity base. We have an appetite for further acquisitions which can create value for us and we would be keen to consider such opportunities," said Gaurang Shah, president (asset management, life insurance and international business) of Kotak Mahindra Bank, the parent company of Kotak AMC.
PineBridge MF's total assets are less than 2% of Kotak AMC's AUM of Rs 37,000 crore (as on August 2014).
Industry experts said that amid tough operating environment, it's difficult for smaller AMCs to survive.
"Smaller AMCs are finding it difficult to increase assets and profitability is a question mark. Going forward, there could be more such exits," said Niranjan Risbood, director (fund research) at Morningstar India.
PineBridge operated seven schemes - three each in equity and debt and one in the gold segment.
Its equity schemes had assets of around Rs 215 crore.
According to Dhirendra Kumar, CEO of Value Research, "It's not surprising to see AMCs exiting. They are unable to compete with bigger peers in the market which are attracting most of the assets. It's a tough environment to do business."
Market regulator Sebi recently increased the minimum networth requirement five-folds to Rs 50 crore.
As on June 2014, India's Rs 10 lakh crore mutual fund industry had a total of 46 players.
Business Standard
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PineBridge MF had assets under management (AUM) of just Rs 660 crore. The deal marks third exit of a foreign fund houses in less than a year and underscores challenging conditions for smaller players.
In previous nine months, Morgan Stanley has sold off domestic mutual fund business to HDFC AMC and ING MF was acquired by Birla Sun Life AMC.
In a statement, Kotak AMC said it has executed definitive agreement to acquire the domestic schemes of PineBridge MF.
The exact deal size could not be ascertained, but industry players pegged the transaction value to be lower than recent acquisitions, which were struck between 4% and 6% of total asset size of the fund house.
"We have agreed to acquire the schemes of PineBridge MF. The assets included are equity-oriented which provides a further enrichment to our equity base. We have an appetite for further acquisitions which can create value for us and we would be keen to consider such opportunities," said Gaurang Shah, president (asset management, life insurance and international business) of Kotak Mahindra Bank, the parent company of Kotak AMC.
PineBridge MF's total assets are less than 2% of Kotak AMC's AUM of Rs 37,000 crore (as on August 2014).
Industry experts said that amid tough operating environment, it's difficult for smaller AMCs to survive.
"Smaller AMCs are finding it difficult to increase assets and profitability is a question mark. Going forward, there could be more such exits," said Niranjan Risbood, director (fund research) at Morningstar India.
PineBridge operated seven schemes - three each in equity and debt and one in the gold segment.
Its equity schemes had assets of around Rs 215 crore.
According to Dhirendra Kumar, CEO of Value Research, "It's not surprising to see AMCs exiting. They are unable to compete with bigger peers in the market which are attracting most of the assets. It's a tough environment to do business."
Market regulator Sebi recently increased the minimum networth requirement five-folds to Rs 50 crore.
As on June 2014, India's Rs 10 lakh crore mutual fund industry had a total of 46 players.
Business Standard
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To unsubscribe from this group and stop receiving emails from it, send an email to Productupdatesforamc+unsubscribe@googlegroups.com.
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