The schemes currently managed by Principal India and Sundaram AMC will either be merged or renamed as Sundaram AMC schemes in their respective categories
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Sundaram Asset Management Company Ltd on Friday said it has received Securities and Exchange Board of India's (Sebi) approval for the purchase of the asset management businesses of Principal Asset Management Pvt Ltd (Principal India).
Sundaram AMC, a wholly-owned subsidiary of Sundaram Finance Ltd., will acquire the schemes 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.
Post the deal closure, the schemes currently managed by Principal India and Sundaram AMC will either be merged or renamed as Sundaram AMC schemes in their respective categories. All investors and distributors of Principal India schemes will become investors/distributors of Sundaram Mutual Fund.
According to Sundaram AMC, a wider range of equity schemes will be available to the more than two million combined investor base and to the strengthened distribution franchise across the country-wide network of 88 branches.
Commenting on the acquisition, Sunil Subramaniam, managing director, Sundaram AMC, said, “We look forward to complementing our existing equities fund management talent with the addition of the team from Principal India. We endeavour to retain and absorb Principal India’s distribution franchise with minimal disruption to their commercial terms. The existence of the same back office service provider (RTA) is expected to smoothen the transition for existing customers and distributors."
The transaction is subject to compliance with the Sebi prescribed processes and fulfilment of mutually agreed conditions precedent to deal closure. As per regulatory requirements, there will be an ‘exit load free window’ for investors to redeem their investments, where such exit load is applicable.
Along with its subsidiaries, Sundaram AMC had assets under management (AUM) of about ₹45,036 crore as of 31 October, of which more than 80% was in equities. On the other hand, Principal India had an AUM of ₹9,558 crore, with about 95% in equities.
Harsha Viji, executive vice chairman of Sundaram Finance, said, “This acquisition is a natural step in our aspiration to become a sizeable player in the asset management industry. The combined business of both the entities will achieve an aspirational landmark of ₹50,000 crore We will be able to leverage the combined platform to derive significant synergies. The focus for us will be on delivering a better experience to our investors and distribution partners."
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