Mirae Asset Mutual Fund has announced plans to hive off its mutual fund business into a subsidiary of the current holding company. The current AMC holding company is called Mirae Asset Global Investments (India) Pvt Ltd and the subsidiary is called Mirae Asset Investment Managers (India) Pvt Ltd. Mirae’s other businesses which center on real estate (an alternative investment fund) and venture capital advisory will be moved into separate subsidiaries. The restructuring is primarily on account of the group’s plans to move into new businesses which an asset management company cannot do under SEBI regulations.
“The restructuring will allow our global parent to scale up their investment in several businesses. It would also allow the AMC to redeploy its own profits in other businesses," said Swarup Mohanty, CEO, Mirae Asset Mutual Fund. At present, Section 24 of the SEBI Mutual Funds Regulations, 1996 does not allow an asset management company to undertake any business activities other than in the nature of management and advisory services provided to pooled assets. “Our venture capital business and real estate businesses are our current focus areas. We could even start our own NBFC in the near future," he added.
A postal ballot of all unit holders will be taken from November 28th to December 28th. Unit holders who have email addresses registered with Mirae Asset will also be able to vote electronically. Consent of 50% of the unit holders is required for the restructuring to be approved. Failure to provide any response will be deemed to be consent. In addition, SEBI has deemed the change not to be fundamental change of attributes because there is no change in the ultimate ownership and control, sponsor or name of the mutual fund (only the AMC which manages the fund is changing). Hence investors will not be given an exit load free period of 1 month to leave the fund, as is normally provided in case of a change in fundamental attributes.