Edelweiss to acquire JP Morgan's mutual fund business in India

NEW DELHI: Edelweiss Asset Management today announced the acquisition of global giant JP Morgan's mutual fund business in India that has assets worth over Rs 7,000 crore, marking yet another exit of a foreign fund house from the over Rs 13 lakh-crore industry.

Under the deal, Edelweiss will acquire all onshore fund schemes managed by JP Morgan Asset Management India including its country-based onshore mutual fund business and the international fund of funds, subject to regulatory approvals, Edelweiss said in a statement.

Post acquisition, the AUMs of the combined entity would be Rs 8,757 crore.

Along with the schemes, Edelweiss said it is committed to absorbing majority of employees of JP Morgan ensuring business continuity as well as a platform for enhanced growth.

The deal size could not be ascertained immediately.

In the past few years, a number of global players have exited the Indian mutual fund business. Reliance Capital Asset Management (RCAM) last year announced takeover of global giant Goldman Sachs' mutual fund business in India for Rs 243 crore in an all-cash deal.

Standard Chartered sold its mutual fund business in India to IDFC in 2008, Fidelity sold its mutual fund to L&T Finance in 2012, while last year HDFC MF acquired Morgan Stanley's fund business here.

Besides, Birla Sunlife had acquired ING Mutual Fund, Kotak MF has bought PineBridge Mutual Fund and Pramerica has taken over Deutsche Bank's MF business in India.
At the end of December, J P Morgan Mutual Fund had assets base of Rs 7,081 crore while that of Edelweiss was at over Rs 1,600 crore.

The acquisition will further strengthen Edelweiss Group's Rs 31,000 crore global asset management businesses, which include the group's existing mutual fund business, credit alternative funds, offshore funds and equity funds.

Edelweiss Group Chairman and CEO Rashesh Shah said: "The Group continues to remain focused on the India growth story and making inroads into the retail space by leveraging our well diversified platform.

"Given the complementary business advantages and the significant business that JP Morgan Mutual Fund has built, this acquisition is a natural win for both Edelweiss and JP Morgan. There will be planned investments into the business in terms of products, technology, distribution and a clear strategy to compound growth."

JP Morgan had entered into the Indian mutual funds business in 2007. Last year, JP Morgan MF got into trouble due to its exposure to debt securities of Amtek Auto.

Despite the exits of several foreign player from the sector, still there are more than 40 fund houses in the country with total AUM (assets under management) of over Rs 13 lakh crore.

"Edelweiss having focused on market expansion and smart product performance has seen a doubling of its AUM, making it among the fastest growing AMC this fiscal. We are sure this acquisition will give further impetus to Edelweiss and move it to the next level of growth. Both teams will endeavour to make this a seamless transition ensuring business as usual across all stakeholders," Edelweiss Asset Management CEO Vikaas M Sachdeva said.