Mutual fund mergers and acquisitions are not new in the industry. In 2022 also the industry saw a few fund houses getting merged and acquired. The year 2021 ended with Sundaram Mutual Fund taking over Principal Mutual Fund. And now, the year 2022 is ending with the talks of Tata Mutual Fund being in final talks to buy a majority stake in UTI AMC.
Let’s take a look at the mergers and acquisitions that happened in 2022 and the changes that they brought along with them for the investors:
Sundaram Mutual acquired Principal MF: Even though this merger happened in 2021, the on-ground changes happened in early 2022. Sundaram Mutual Fund completed the acquisition of Principal Mutual Fund on December 31, 2021. The acquisition led to certain schemes of Sundaram Mutual merging with corresponding schemes of Principal MF and vice-versa.
Some schemes of Principal MF were also taken over by Sundaram MF and the names were changed. Hence, the old Principal MF schemes ceased to exist and the unit holders in those schemes were allotted different units in the newly merged schemes.
HSBC AMC acquired L&T Mutual Fund: HSBC Asset Management (India) completed the acquisition of L&T Investment Management for a consideration of US$ 425 million in November, 2022. L&T Investment Management is a wholly-owned subsidiary of L&T Finance Holdings and the investment manager of L&T Mutual Fund.
The schemes of the mutual funds operated by L&T Mutual Fund were transferred to HSBC Mutual Fund or merged with HSBC schemes. The sponsorship, trusteeship, management and administration of the schemes of L&T Mutual Fund are correspondingly changed to HSBC Securities and Capital Markets (India) Private Limited, Board of Trustees of HSBC Mutual Fund and HSBC Asset Management (India) Private Ltd respectively.
Since all of this was a change in fundamental attributes of these schemes, the unitholders of the concerned scheme were informed of the change by way of a written communication and an option to exit the scheme within a period of 30 days at the prevailing NAV without any exit load was provided to them.
Bandhan-led consortium acquired IDFC AMC: On December 1, the Securities and Exchange Board of India (SEBI) cleared Bandhan-led consortium’s proposed acquisition of IDFC Asset Management Company. Earlier this year, a consortium of Bandhan Financial Holdings GIC, and ChrysCapital signed an agreement to buy IDFC AMC and IDFC AMC Trustee Company from parent IDFC, for Rs 4,500 crore.
The acquisition has gotten all the approvals from RBI, SEBI and CCI, however the on ground changes are still under process. Post the acquisition, IDFC AMC will be renamed as Bandhan AMC and IDFC Mutual Fund is proposed to be renamed as Bandhan Mutual Fund.
