Japanese life insurance firm Dai-ichi Life Holdings has ventured into the asset management business in India by acquiring 39.62% stake in the mutual fund arm of state-run lender Union Bank of India Ltd.
The value of the transaction was not disclosed.
Union Bank said in a statement that Dai-ichi Life has invested in compulsorily convertible preference shares of Union Asset Management Company Pvt. Ltd.
The mutual fund firm will now be co-sponsored by Union Bank of India and Dai-ichi Life
Union Bank of India said the partnership would bring synergy for a strong capital base, future business growth and efficient corporate governance.
As per the deal, Dai-ichi Life can appoint one nominee director on the board of Union AMC.
However, there will be no change in the key personnel or the existing fund management team. There will also be no rebranding of Union AMC or its schemes.
Union AMC has been operational since 2011. As of April this year, its total average assets under management stood at Rs 4,163 crore across differentiated product categories.
The firm was earlier known as Union KBC Asset Management Company Pvt. Ltd.
In 2016, Union Bank had bought out joint-venture partner KBC Asset Management’s 49% stake the firm.
Tokyo-listed Dai-ichi Life is a financial services holding company which carries out both insurance and non-insurance business through various subsidiaries and affiliated companies.
Union Bank of India already has a partnership with Dai-ichi Life in the life insurance business. Star Union Dai-ichi Life Insurance Company is a joint venture of public-sector lenders Bank of India (28.96%), Union Bank of India (25.1%) and Dai-ichi Life (45.94%). The shareholding figures are as of March 2017.
Recent developments in the mutual fund space
Earlier this month, financial services firm DSP Group said it would buy out BlackRock Inc’s 40% stake in joint venture DSP BlackRock Investment Managers Pvt. Ltd to become the sole owner of the asset management firm.
In March, HDFC Asset Management Company Ltd, the mutual fund arm of mortgage lender Housing Development Finance Corp, filed for an initial public offering. The IPO size is estimated at Rs 2,400-2,500 crore (around $384 million).
In addition, IDFC has initiated the process to sell its asset management business, according to media reports.
In March last year, IDFC Financial Holding Company Ltd, a subsidiary of IDFC Ltd, had agreed to buy back a 25% stake in IDFC AMC from Paris-based Natixis Global Asset Management for Rs 244.24 crore.
In October last year, Reliance Nippon Life raised Rs 1,542.24 crore ($238 million) via an IPO.
