Sundaram Asset Management obtains Sebi’s approval to acquire Principal AMC India
Sundaram Asset Management Company Ltd announced on Friday that it has received approval from the Securities and Exchange Board of India (Sebi) to purchase the asset management business of Principal Asset Management Pvt Ltd (Principal India).
Sundaram AMC, a wholly-owned subsidiary of Sundaram Finance Ltd., will acquire the programs managed by Principal India and acquire 100% of the share capital of Principal Asset Management Pvt. Ltd., Principal Trustee Company Pvt. Ltd and Principal Retirement Advisors Pvt. Ltd.
The deal was originally announced on January 28.
Following the closing of the transaction, the programs currently managed by Principal India and Sundaram AMC will either be merged or renamed as Sundaram AMC programs in their respective categories. All investors and distributors of Principal India programs will become investors / distributors of Sundaram Mutual Fund.
According to Sundaram AMC, a wider range of investment programs will be available for the combined investor base of over two million and for the strengthened distribution franchise through the nationwide network of 88 branches.
Commenting on the acquisition, Sunil Subramaniam, Managing Director of Sundaram AMC, said: “We look forward to complementing our existing equity fund management talents with the addition of the Principal India team. We endeavor to retain and absorb Principal India’s distribution franchise with minimal disruption to their business conditions. Having the same back office service provider (RTA) should ease the transition for existing customers and distributors. “
The transaction is subject to compliance with the processes prescribed by Sebi and to the fulfillment of mutually agreed upon conditions precedent to the closing of the transaction. In accordance with regulatory requirements, there will be a “no exit charge window” for investors to redeem their investments, where such an exit charge is applicable.
Along with its subsidiaries, Sundaram AMC had assets under management (AUM) of approximately ??45,036 crore as of October 31, of which more than 80% in shares. On the other hand, Principal India had assets under management of ??9,558 crore, with about 95% in shares.
Harsha Viji, Executive Vice President of Sundaram Finance, said: “This acquisition is a natural step in our aspiration to become a strong player in the asset management industry. The combined activity of the two entities will reach an ambitious milestone of ??50,000 crore We will be able to leverage the combined platform to leverage significant synergies. The goal for us will be to provide a better experience for our investors and distribution partners. “
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