The Hindu Business Line : Bank of Baroda in pact with Pioneer Global

Bank of Baroda has signed a memorandum of understanding with the Italian company, Pioneer Global Asset Management to set up a joint venture asset management company in India in the next six months.

Bank of Baroda plans to disinvest a portion of its shareholding in BOB Asset Management Company in favour of Pioneer Global Asset Management, said Mr AK. Khandelwal, Chairman and Managing Director. BOB's Asset management company currently has a corpus of around Rs 150 crore.

He, however, did not disclose the value of the disinvestments but added, "It was at a premium."

Bank of Baroda and Pioneer Global Asset Management propose to hold 49 per cent and 51 per cent of the equity share capital and 30 per cent and 70 per cent of the total paid up capital of the planned joint venture, respectively.

Mr Khandelwal said Pioneer would control the management and bring in the domain knowledge and technology for the new joint venture.

"This is in line with our strategy of providing a wide range of services including mutual fund products to our customers," he said.

Europe brings the bulk of the business for Pioneer Global Asset Management Company at 70 per cent, followed by the US (25 per cent) and Asia (5 per cent). The company has around 250 billion of assets under management.

Mr Dario Frigerio, Chief Executive Officer, Pioneer Global Asset Management, said the company's exposure to emerging markets stands at $10 billion and India contributes less than $1 billion.

He said the company was currently present in India as an institutional investor.

"From the commercial point of view, India is a great hub. Human capital is a big advantage in India and we plan to set up investment research teams here," Mr Frigerio said.

Pioneer Global Asset Management Company had tied up with the HC Kothari Group in 1993 to form the Kothari Pioneer Mutual Fund. The company, however, exited India in 2002. "It was a long time ago and we had the wrong partner," Mr Frigerio said.

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