Powerful Indian business houses are swallowing foreign mutual fund players slowly, but surely. The latest MF Company to exit the Rs. 13 lakh crore Indian market is Goldman Sachs, after Reliance Capital Asset Management (RCAM) took over their Indian MF business for 243 crores. It is not an isolated incidence.
Standard Chartered sold its mutual fund business in India to IDFC in 2008, Fidelity sold its mutual fund to L&T Finance in 2012, while last year, HDFC MF acquired Morgan Stanley’s fund business in India.
Led by Anil Ambani, this is RCAM’s first ever takeover of a foreign enterprise, and they couldn’t have possibly struck a better deal. RCAM will acquire all 12 onshore mutual fund schemes of Goldman Sachs Asset Management India, with total asset under management of Rs 7,132 crore. The deal will also make Reliance MF the exclusive fund manager for the Government’s ambitious Central Public Sector Enterprises (CPSE) Exchange Traded Fund.
By this single deal, RCAM has further solidified its hold over the industry. Globally, Goldman Sachs Asset Management is one of the biggest fund managers with AUM of over $1.19 trillion across countries and asset classes.
“Reliance Capital Asset Management will pay a total sum of Rs 243 crore ($37.5 million) in cash to acquire all onshore mutual fund schemes, including exchange traded funds, of GSAM India.
RCAM CEO Sundeep Sikka said the deal will add over half a percent to its market share. “We will ensure that we maintain seamless continuity for all GSAM India fund investors across all schemes. Going forward we would be willing to consider more such acquisitions that add to our strength and complement our portfolio.”