Union Bank buys KBC AMC's entire stake in MF JV

This article has been modified. Please see clarification at the end.

State-owned Union Bank of India has bought Belgian KBC Asset Management Company (AMC)’s 49 per cent stake in mutual fund joint venture (JV) Union KBC AMC for an undisclosed sum. Set up in 2009, Union KBC AMC is a mid-sized AMC with assets under management of Rs 2,672 crore (as of September).

Typically, an AMC is valued at three-four per cent of equity assets and less than one per cent of debt assets.

“The transaction, which is subject to regulatory approval, will have no impact on the joint venture’s client positions and product portfolio,” read a release by the fund house.

“This transaction reaffirms Union Bank’s vision to provide all financial solutions under one umbrella which, apart from banking products and services, also includes life insurance products through its joint venture, Star Union Dai-ichi Life Insurance Co, and mutual fund products through Union KBC AMC, to its customers,” said Arun Tiwari, chairman, Union Bank of India. “This agreement fits in with KBC Asset Management’s strategic focus on KBC Group’s core markets and activities,” said Johan Thijs, chief executive of KBC Group. Globally, KBC AMC manages assets worth about ^200 billion.

The domestic mutual fund sector has 44 AMCs, which together manage assets of Rs 12.95 lakh crore. The sector has several JVs between public sector banks and foreign investment managers. These include Bank of India AXA MF, Canara Robeco MF and Baroda Pioneer MF.

CLARIFICATION
An earlier version of this article valued Union KBC AMC's assets under management at Rs 26,722 crore. The correct vlauation is Rs 2,672 crore. The error is regretted.