UBI Sells 40% in MF Arm to Dai-ichi Life
Mumbai: State-run Union Bank of India has signed a deal to sell 40% stake in its mutual fund business to Dai-ichi Life Insurance Company of Japan.
The entry of the Japanese fund withdeeppocketswillnotonlyraise the prospects of Union Mutual Fund,butalsoacceleratethecompetition in an industry which is growing at 32% last fiscal and doubled from July 2014.
“The board has given approval to partner with Dai-ichi. The details are yet to be worked out,’’ said Rajkiran Rai, managing director at Union Bank of India.
Earlier, Union Bank had tied up with KBC Participations Rental SA to form KBC Asset Management Company, where the Belgian firm held 49% in the asset management business. Later, in September 2016, KBC sold its entire stake in mutual fund to Union Bank of India.
Indian mutual fund industry has come of age making it attractive for global players. Japan’s Nippon owns a stake in Reliance Asset Management which is poised to get listed on the stock exchanges. Global players like Prudential and Franklin Templeton dominate the industry.
In July, a clutch of funds, based in the US and Singapore picked up a 4.43% stake in Reliance Asset Management for ₹ 675 crore.
In terms of assets under management(AUM),UnionMutualFundis ranked No 30 amongst 42 AMCs, with an average AUM of ₹ 3,767 crore at the end of June 2017. The Indian Mutual fund industry has a total AUM of ₹ 19.97 lakh crore. “An asset management company could be valued on the mix of assets it has. Equity assets could fetch you 4-6%, while debt assets could be 1-2%. In addition brand, size, profitability of the AMC could also play a crucial part,” says Kaustubh Belapurkar, director of fund research at Morningstar India.