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(L-R)-Mr. Andrew Lo, Senior Managing Director and CEO of Invesco Asia Pacific, Mr. Ashok Hinduja, Chairman, IIHL and Moses Harding, CEO, IIHL at the signing ceremony
Hinduja Group’s IndusInd International Holdings (IIHL) on Tuesday announced its entry into the asset management space with the acquisition of a 60 per cent stake in US-based Invesco’s domestic arm Invesco Asset Management India (IAMI).
Invesco Mutual Fund (MF) is the 17th largest fund house in India with the average assets under management (AUM) of over Rs 74,300 crore in the March quarter. According to Invesco, the India arm manages nearly Rs 85,400 crore through mutual fund schemes and offshore advisory.
IIHL and Invesco have formed a joint venture (JV) for the purpose, where the latter will hold a 40 per cent stake. The two companies will become the sponsor of the fund house. The deal is subject to regulatory approvals, the companies said in a press release.
“Both partners bring their respective strengths to the venture with Invesco’s portfolio of global products and processes, and IIHL facilitating a strong distribution network of 11,000+ pan India touch points and 45 million customer base,” the release stated.
The Invesco acquisition signals the Hinduja Group’s aim to straddle the entire financial ecosystem. After emerging as the successful resolution applicant to acquire Reliance Capital under the IBC process, the group is acquiring control of various group companies of the beleaguered financial services company in areas such as life, general and health insurance, broking and asset reconstruction.
The Invesco deal is seen as a win-win as India’s MF space is dominated by bank-backed fund houses. SBI MF, ICICI Prudential MF and HDFC MF are the three largest fund houses in the country, while Kotak MF, Axis MF, Bandhan MF and Canara Robeco MF feature in the top 15. In the case of most of these fund houses, the sponsor bank is its largest distributor.
Almost all large banks in India have an associated fund house with Bandhan Bank being the newest entrant. Bandhan Financial Holding-led consortium had completed the acquisition of IDFC Asset Management Company last year.
The MF space in India has seen several new entrants, mostly fintechs and portfolio management services, over the last few years amid growing investor awareness.
The new players include Zerodha, Groww, Bandhan, Samco, Helios and Old Bridge. They have entered through fresh licences or acquisition. Jio Financial has also applied for MF licence in a JV with US’ BlackRock and is currently awaiting regulator nod. At present, the industry has 45 players.
The MF industry has witnessed strong growth in the post-Covid period with the AUM doubling in the last four years. The average AUM, which stood at Rs 27 trillion in Q4 FY20, has now surged to Rs 54 trillion, shows data from the Association of Mutual Funds in India (Amfi).
First Published: Apr 09 2024 | 6:15 PM IST
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