Mumbai: India’s Ambit Holdings Pvt. Ltd and Japan’s Nikko Asset Management Co. Ltd on Monday announced a new joint venture initiative to manage India-dedicated funds and offer advisory services.
Nikko Asset Management will pick up a 50.1% stake in Ambit Mauritius Investment Managers Pvt. Ltd and 49% in Ambit Investment Advisors Pvt. Ltd as agreed by the Indian and Japanese financial services firms. No financial details were provided.
The dedicated India funds of the partners will be managed and advised by the joint ventures with assets under management of $150 million. Nikko’s funds will account for some $115 million, while the remaining $35 million will come from Ambit’s funds.
The four funds to be managed by the joint ventures are Nikko Asset Management BRICs Fund, Nikko Asset Management Tri-Asset Fund, Ambit Frontier Fund and Ambit QInvest India Fund.
“We’re partnering with Nikko in a 50:50 venture as a result of which we should be able to get the Indian allocation of the BRIC fund managed by Nikko immediately and use their deep distribution to be able to raise significantly larger institutional and retail assets under management for investments in India,” said Ashok Wadhwa, group chief executive, Ambit Holdings.
Nikko will also assist Ambit in building its advisory team in India. Ambit has a presence in investment banking, corporate finance, institutional equities, private wealth management, investment advisory services, private equity and non-banking financial services.
Nikko is the largest regional asset management company headquartered in Asia, with total assets under management of $157 billion with a distribution network comprising more than 300 banks and life insurance companies across the continent.
“In this competitive landscape, the ability to scale up rapidly is a challenge and our conclusion was that a partnership with Nikko reduces the risk and enhances the chances of success of raising significantly larger assets under management,” Wadhwa said.
While the joint venture gives Ambit the ability to tap into Nikko’s product development capabilities and extensive distribution network, it provides Nikko with local knowledge and investment expertise for its India-dedicated funds.
“The best way to work in each country is through joint ventures. Joint ventures are in our DNA,” said Timothy McCarthy, chairman and chief executive, Nikko Asset Management.
Ambit and Nikko already have a partnership in India with their first agreement signed for an asset management business in December 2006. Currently, they have applied to Indian capital market regulator Securities and Exchange Board of India to jointly sponsor the domestic asset management company. Nikko will hold a 51% stake in the venuture and the remaining 49% will be Ambit’s share.
Besides Nikko, two other global financial services firms, Nippon Life Insurance Co. and Goldman Sachs Group Inc., have plans to expand their footprint in India.
Anil Ambani’s Reliance Capital Ltd expects to complete the sale of a 26% stake in its fund management unit to Japan’s Nippon Life Insurance by March next year. Goldman Sachs in March announced it had acquired Benchmark Asset Management Co. Pvt. Ltd, India’s largest provider of index-tracking funds.
Bloomberg contributed to this story.