Sundaram Asset Management Company Limited, on November 19, announced that it had received regulatory approval for the purchase of the asset management businesses of Principal Asset Management Pvt. Ltd.
A 100 percent subsidiary of Sundaram Finance, the company said that it will acquire the schemes managed by Principal India and acquire 100 percent of the share capital of Principal Asset Management Pvt. Ltd., Principal Trustee Company Pvt. Limited, and Principal Retirement Advisors Pvt. Ltd., which was originally announced on the 28th of January 2021.
"The transaction is subject to compliance with SEBI prescribed processes and fulfillment of mutually agreed conditions precedent to deal closure. As per regulatory requirements, there will be an ‘exit load free window’ for investors to redeem their investments, where such exit load is applicable, the company said in a press release.
"Post deal closure, the schemes currently managed by Principal India and Sundaram will either be merged or renamed as Sundaram schemes in their respective categories," it said.
"All investors and distributors of Principal India schemes will become investors/distributors of Sundaram. Thus, a wider range of equity schemes will be available to the more than two million combined investor base and to the strengthened distribution franchise across the country-wide network of 88 branches," it said.
Commenting on the acquisition, Sunil Subramaniam, Managing Director, Sundaram Asset Management Company said, “We look forward to complementing our existing Equities fund management talent with the addition of the team from Principal India. We endeavor to retain and absorb Principal India’s distribution franchise with minimal disruption to their commercial terms. The existence of the same back office service provider (RTA) is expected to smoothen the transition for existing customers and distributors.”
"As Sundaram acquires our India asset management and retirement advisory businesses, our top priority is to ensure the best outcome and a smooth transition for our customers, distributors and employees," said Mr. Pedro Borda, Chief Operating Officer, Principal International.
The decision to sell out by Principal AMC will add to the long list of asset management companies with foreign ownership exiting India.
As on December 31, 2020, Indian Mutual fund industry has 41 fund houses and assets under management stood at Rs 31 billion.