Mahindra looking for foreign partner to grow MF business

Mahindra Mutual Fund has begun scouting for a foreign partner to ramp up operations and improve fund management capabilities, said people in the know.

Mahindra MF, which began operations in July 2016, is currently a bit-player and placed 31 among 42 fund houses, with assets under management of about ~40 billion.

It has three equity schemes with assets of ~10.5 billion and aims to make inroads in regions where Mahindra Finance and its subsidiaries are active in.

“They have begun scouting for a foreign partner,” said a person familiar with the matter.

“We have not selected or chosen any specific inorganic route yet. Any partnership will be for reasons such as expertise or value addition to the core business of asset management, and a shared vision to grow the business beyond the top few cities,” said

Ashutosh Bishnoi, Managing Director and Chief Executive Officer of Mahindra

Mutual Fund.

Historically, deals in Indian asset management have happened at 5-6 per cent of the assets under management (AUM). As of June, there were 13 foreign players in a joint venture with Indian asset management companies.

The most recent company

“Any partnership will be for reasons such as expertise or value addition to the core business of asset management”

to tie up with a foreign player was Union Bank of India, which announced an investment by Dai-ichi Life Holdings in Union Asset Management Company in May. As part of this new partnership, Dai-ichi Life holds 39.62 per cent of the share capital of Union AMC through investment in compulsorily convertible preference shares, making it a cosponsor in the AMC. ASHUTOSH BISHNOI,