SBI Mutual Fund to buy Daiwa’s Indian asset management business

The firm will buy Daiwa for at least Rs.1.3 crore, according to two persons with direct knowledge of the matter
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First Published: Tue, Jun 04 2013. 12 12 PM IST
The value being paid by SBI Mutual Fund for Daiwa mutual fund is around 50 basis points of the latter’s mutual fund assets in India. Photo: Priyanka Parashar/Mint
The value being paid by SBI Mutual Fund for Daiwa mutual fund is around 50 basis points of the latter’s mutual fund assets in India. Photo: Priyanka Parashar/Mint
Updated: Tue, Jun 04 2013. 08 27 PM IST
Mumbai: State Bank of India (SBI)-owned mutual fund arm SBI Funds Management Pvt. Ltd will buy Daiwa Asset Management (India) Pvt. Ltd for at least Rs.1.3 crore, two persons with direct knowledge of the matter said.
The value being paid by SBI Mutual Fund for Daiwa mutual fund is around 50 basis points of the latter’s mutual fund assets in India. “The deal was struck late on Monday,” said one of the persons. Neither of the two persons wished to be named.
A media statement by SBI Mutual Fund, on Tuesday evening, said the company has agreed to acquire Daiwa MF’s existing fund schemes, their sponsorship, management and administration. For the quarter ended March 2013, Daiwa MF managed average assets worth Rs.266.12 crore, while SBI MF is the sixth largest asset management company in India with average assets of Rs.54,905.44 crore.
Mint reported 5 October that Daiwa MF was in sell-off talks with SBI Mutual fund. Though the valuation is small, the transaction will mark the first acquisition by a public sector asset management company in India. One of the reasons for the low valuation of the deal is that Daiwa’s schemes are mostly debt-oriented, which fetches lower fees and commissions than equity oriented ones, said a mutual fund expert in Mumbai.
SBI MF said the transaction was subject to regulatory approvals.
“This acquisition will help SBI MF acquire a unique client base which will increase its penetration in retail and HNI (high-networth individual) space,” said the SBI release.
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First Published: Tue, Jun 04 2013. 12 12 PM IST
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