Sundaram Asset Management Company, a wholly owned subsidiary of Sundaram Finance, has acquired Principal Asset Management business in India for ₹338.53 crore. Principal Asset Management has assets under management of ₹7,447 crore as of December-end with about 90 per cent of this in equity-oriented schemes.
As part of the deal, Sundaram AMC will buy out the entire share capital of Principal Asset Management, Principal Trustee Company and Principal Retirement Advisors.
The transaction is subject to the receipt of necessary regulatory approvals and SEBI prescribed processes.
Sunil Subramaniam, Managing Director, Sundaram Asset Management Company, said the transaction will strengthen Sundaram MF presence in the market place with the addition of a range of schemes with a good long term performance track record across the large and mid-cap segments.
“This will complement our business which has traditionally been weighted towards the mid- and small-cap segment,” he said.
Sundaram is a significant player in the fund management space with a 25-year track record. Sundaram has over ₹40,000 crore in assets under management, the majority of which is in equity oriented schemes.
Pedro Borda, chief operating officer, Principal International said as part of a systematic review of the company’s portfolio of businesses and global market dynamics, it was decided to exit the asset management business in India. “As we transition the business, customers and distributors will remain our top priority. We believe they will benefit from Sundaram Asset Management’s larger mutual fund platform in this market,” he added.
TT Srinivasaraghavan, Managing Director of Sundaram Finance, said this acquisition is a natural step in Sundaram’s aspiration to become a sizeable player in the asset management industry.
The deal will enable to leverage the combined platform to derive significant synergies and the focus will be on delivering a better experience to investors and distribution partners, he added.
Sundaram and Principal will work to ensure that there will be no disruption of service to their partners and investors in the interim, and a seamless transfer once approval is obtained, said Sundaram AMC in a statement.
Principal said it is committed to the continued operation of Principal Global Services in Pune and Hyderabad to provide critical technical support and services to its offices around the globe.
JM Financial was the financial advisor and J. Sagar Associates acted as the legal advisors to Sundaram AMC.
Barclays was financial advisor and Cyril Amarchand Mangaldas as the legal advisors to Principal.