Temasek in buyout talks with multinational MF

Eyeing the country's lucrative mutual funds market, Singapore-based Temasek Holdings is in talks with a multinational fund house for a complete buyout.

The company is said to be in the final stages of negotiations with the fund house which manages over Rs 9,000 crore of assets, investment banking sources said here.

"Temasek is negotiating terms with a foreign fund house which has got no presence in the AUM business internationally, hence as a policy decision it wants to exit this market in India as well," highly placed sources said.

Standard Chartered Mutual Fund India, which has assets under management of Rs 9,500 crore, is the only branch under which the parent company has made a significant foray into the mutual fund business anywhere in the world.

Temasek, with a strong global presence worth Singapore dollar 103 billion, has already applied to market regulator Securities and Exchange Board of India (Sebi) for a licence to enter the Indian mutual fund industry.

Earlier, Temasek had hired Ajay Bagga, former Kotak Mahindra Financial chief executive officer, as fund manager for the mutual fund.

Since this mutual fund has got a good base, they expect a higher valuation in the given market conditions, sources said. Temasek spokespersons were not available for comment.

This inorganic growth should help Temasek to enter the market in a big way with an asset under management (AUM) of around Rs 10,000 crore, thus giving them the advantage in the highly competitive market.

Industry sources said along with Temasek, three more global players including JP Morgan, AIG, and Aegon have applied for licence to enter the mutual fund industry and are in the process of getting necessary regulatory approvals.

As per the data released by the Association of Mutual Funds in India (Amfi), the AUM of the domestic mutual fund industry stood at Rs 2.655 trillion in June. When contacted, a spokesperson for the Singapore-based Temasek refused to "comment on speculation."