More foreign MFs on way out as Nomura plans to exit LIC

Japanese fund house Nomura may become the tenth foreign asset management company to exit the crowded Indian mutual fund (MF) market in the past seven years, if it calls off the five-year joint venture with state-run insurance giant LIC, as is widely speculated.

With the exit of Goldman Sachs India AMC, which sold its business to Reliance Capital for Rs 243 crore on Wednesday, there are 43 MFs in India managing assets worth about Rs 13-lakh crore. The American fund house is the seventh to leave the country.

The Japanese firm holds 35 per cent stake in LIC-Nomura MF, which had assets under management (AUMs) of a little over Rs 11,157 crore as of September- end, making it the 19th largest player in terms of AUM. Both LIC and Nomura declined to comment on these reports.
 

While StanChart India AMC sold its business to IDFC in 2008, Fidelity sold its mutual fund to L&T Finance in 2012, and HDFC MF acquired Morgan Stanley's fund business here in 2013. In the same year, SBI Mutual Fund bought Daiwa AMC.

Last year saw Birla SunLife acquiring ING Mutual Fund, Kotak MF buying out PineBridge Mutual Fund and Pramerica is in the process of taking over Deutsche Bank's MF business.

Early this month, state-run Union Bank of India agreed to buy out the 49 per cent stake in the Belgian fund house KBC from its mutual fund business here Union-KBC Mutual Fund.

Making its first-ever buyout, RCAM has decided to acquire all 12 onshore schemes of Goldman Sachs AMC with total assets base of Rs 7,132 crore. The deal will make Reliance MF the exclusive fund manager for Government's ambitious Central Public Sector Enterprises (CPSE) Exchange Traded Fund.

LIC Mutual Fund has been in existence for the last 25 years. LIC's partnership with Nomura began in January 2011.

"Most of the funds managed by them (LIC-Nomura MF) are performing extremely well and looking at the wide experience of their fund managers, it will only get better from here," the sources said.