BackCosmea Financial forms JV to enter mutual funds biz
Cosmea Financial Holdings will hold 74% stake in the joint venture entity Torus Oro, while OroWealth and its founders will own 26%.
PremiumMUMBAI : Cosmea Financial Holdings Pvt Ltd has formed a joint venture with OroWealth, a wealth and investment management startup, to foray into mutual fund business.
Cosmea Financial, promoted by Soumen (Sam) Ghosh, former chief executive officer of Reliance Capital was incorporated in 2020 as a small finance bank.
Reliance Capital, currently under insolvency resolution, was once the parent of India's second largest mutual fund house in India in terms of assets under management (AUM). Reliance Capital's mutual fund business was acquired by Japan’s largest life insurance company Nippon Life Insurance in October 2019.
Cosmea Financial Holdings will hold 74% stake in the joint venture entity Torus Oro, while OroWealth and its founders will own 26%.
The new AMC is the latest entrant to the mutual fund business coming from the startup space, including Sachin Bansal's Navi Mutual Fund, Zerodha, among others.
Nitin Agrawal, who is the founding member of OroWealth will be the chief executive officer of Torus Oro.
Torus Oro has applied for an AMC license with the Securities and Exchange Board if India (Sebi) and expects to launch its operations by December 2022, subject to regulatory approvals.
Cosmea Financial will bring the necessary capital and distribution strength both digital and physical, while OroWealth will bring in technology and distribution tie-ups to the venture.
“We will empower distribution partners and customers with sophisticated portfolio analytics tools, use data analysis techniques to augment fund research and optimise fund operations with automation," said Nitin Agrawal.
“Mutual fund is the simplest financial product for any investor given the low ticket size and its liquidity. It is also one of the most regulated industry. In that sense we believe that the mutual fund industry in India is poised to grow," he added.
The digital-first AMC aims to have ₹ 10,000 crore in assets under management over three years, with its portfolio focussed on passive, smart beta, international and retirement products.
“Right now the industry is ₹ 37 lakh crore which is anticipated to grow at ₹ 50 lakh crore. The ₹ 10,000 crores AUM is a relatively conservative target set by the company," Agrawal said, adding that the company will aim to plug existing product gaps, offering comprehensive passive funds and beta offering.
Currently, asset management companies in the listed space include HDFC AMC, Aditya Birla Sun Life AMC, Nippon Life AMC, etc.
Speaking about the competitive scenario Agarwal said while there are larger players in the same market, the company's technology-first approach will enable it differentiate itself while reaching its objectives.
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