Hathway buys 39% in ING Vysya MF

MUMBAI: It may be a while before mutual funds are allowed to invest in real estate, but that hasn’t stopped developers from buying into these funds. Less than six months after he exited the MF business by selling out of Franklin Templeton, Mumbai-based realtor Rajan Raheja is set for a second innings in one of the fastest-growing segments of the financial services market.

Hathway Investments, a company owned by the Rajan Raheja group, has bought out ING Vysya Bank’s entire 39% stake in ING Vysya Mutual Fund for an undisclosed sum.

Following the deal, ING will hold 42.5% in the fund, to be renamed ING Mutual Fund, Hathway 39%, and existing Indian shareholder—Kirti Equities—will retain 18.5%. The asset management company’s (AMC) total assets under management as on March 31, ‘07, were close to Rs 3,630 crore.

For the year ended March ‘06, the AMC had reported a net loss of Rs 21 crore. This could have depressed the valuation of the fund house, which usually ranges from 4-6% of assets. Hathway, which earlier held a 25% stake in Franklin Templeton, is estimated to have pocketed around Rs 300 crore from the sale of its stake.

“The management of Raheja group has significantly contributed to the growth of the life insurance business and we envisage similar support for the growth plans of ING MF,” Mike Ferrer, ING Investment Management’s regional general manager, told ET.