Pioneer to pick up 51% stake in BOB Mutual

Pioneer Global Asset Management, part of Italian banking group Unicredito, will pick up 51 per cent stake in BOB Asset Management Ltd, a subsidiary of Bank of Baroda, to grow its mutual fund business.

European fund house in re-entering India after exiting in early part of this decade. It had a presence in India through Kothari-Pioneer Mutual Fund.

Unicredito acquired Pioneer group in 2000. But Unicredit was not able to get along with Indian joint venture partner and, hence, decided to exit from India.

BOB singed a memorandum of understanding with Pioneer, concinding with the visit of Italian Prime Minister Romano Prodi to India.

Pioneer will acquire stake at premium and control the operations of AMC as they will provide domain expertise, BOB chairman and managing director A K Khandelwal said.

The discussion with Pioneer for a possible alliance was underway for more than six months. BOB will bring in local expertise and access to its wide distribution network of over 2,700 branches plus 29 million customers, Khandelwal said.

Dario Frigerio, chief executive of Pioneer's Investments, said Asia's share in Pioneer's Assets under management (about ¤220 billion) was just 5 per cent. The emerging market portfolio was of Euro 10 billion, while the exposure to Indian capital market was under Euro 1 billion.

India is an important market with a strong growth momentum. It will be a important hub for operations and may build global investment research team in India to take benefit of the rich talent pool, he said.

The Unicredito group will also explore the possibility to establishing investment banking and private equity presence in India.