At a time when Indian individuals are increasingly investing in mutual funds to build long-term corpus and assets under management (AUM) of the industry are growing rapidly, there are ownership changes happening in India mutual fund industry. With DSP Group — headed by Hemendra Kothari — buying out BlackRock’s 40% stake in joint venture, there has been over 25 ownership changes in India’s mutual fund companies in the past 10 years. These range from foreign companies selling stake to local companies, to foreigners buying stakes in home-grown ones.

BlackRock saga

BlackRock is the world’s largest asset managers and the joint venture with DSP group, a homegrown company, had become the ninth largest mutual fund company in the country. BlackRock had agreed to sell its 40 per cent interest in DSP BlackRock, which in total, manages assets of over Rs 1.1 lakh crore. Both the companies did not disclose the details of the deal. In fact, initially BlackRock was in talks with DSP for more than a year and were interested to buy the 60% stake of DSP group. However, it later junked the idea and instead, sold its stake in the joint-venture. After the deal, DSP BlackRock Mutual Fund will be renamed DSP Mutual Fund, while the holding company will be known as DSP Investment Managers.

Recent AMC Exits

Companies Acquirer Year AUM before exit (Rs)
J P Morgan MF Edelweiss MF 2016 4520
Goldman Sachs MF Reliance MF 2016 7476
Deutsche MF DHFL Pramerica 2016 25766
Pine Bridge MF Kotak MF 2015 543
ING MF Aditya Birla Sun Life MF 2014 436
Morgan Stanley MF HDFC 2014 2077
Daiwa MF SBI MF 2013 27
Fidelity MF L&T MF 2012 7082

Source: AMFI, media reports

In 1996, DSP Group had tied up with Merrill Lynch Investment Managers to establish its retail asset management business in India as DSP Merrill Lynch Asset Management. In 2008, BlackRock had bought out Merrill Lynch’s 40% stake in DSP group’s joint venture to establish retail asset management business in India. The business subsequently went on to become DSP BlackRock Investment Managers in 2008. The US-based BlackRock is the biggest asset manager in the world and managed around $6.32 trillion in assets worldwide. While investors would panic on the change in ownership at DSP BlackRock, Morningstar, a global mutual fund advisory company says, DSP has a good legacy and they will do well even without BlackRock. Just like L&T AMC has done very well after the exit of Fidelity.

Past exits by foreign players

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