Japan’s troubled Shinsei Bank and billionaire investor Rakesh Jhunjhunwala are said to be selling out their Indian mutual fund joint
venture to Daiwa for about $10 million, as industry profitability erodes on rising competition and regulatory restrictions, two senior bankers familiar with the matter told ET.
The two-year old venture could provide Daiwa, a cross-town rival of Shinsei, a platform to expand in the financial services in a nation of fast-growing middle class. For Shinsei, which sold real estate in Japan to shore up its finances after losses, it may free up resources from a tiny venture to focus on merging with Aozora Bank.
Daiwa Capital Markets, which had raised funds for Indian mutual funds from Japanese investors, can now offer asset management services on its own. Recently, it hired bankers from Credit Suisse and YES Bank to raise business in equity capital markets, private equity and M&A. It plans to double the investment banking team to 18.
“The deal is almost done, it has to now receive regulatory approvals,” said a person privy to the development. Indian mutual fund industry has been losing charm in the past few months, as regulators are cracking down on what is considered unfair practices to get funds.
The Securities & Exchange Board of India, or Sebi, abolished entry loads on mutual fund investments, slowing inflows for asset management companies. Banks, a major source of assets for mutual funds, have been asked to withdraw their money by the Reserve Bank of India.
Aditya Rattan, country head of Daiwa Capital Markets India, declined comment. “We have no comment on this matter,” said James Seddon, group IR & corporate communications division, Shinsei Bank, in an email response.
If the deal goes through, Shinsei, which manages Rs 448 crore of assets in debt and equity schemes, will be valued at about 10% of assets, comparable with previous deals. L&T Finance last December paid Rs 45 crore to buy DBS Cholamandalam Asset Management, a joint venture between Singapore’s DBS and the Chennai-based Cholamandalam.
Source : http://economictimes.indiatimes.com/personal-finance/mutual-funds/mf-news/Shinsei-Jhunjhunwala-may-sell-MF-business-to-Daiwa/articleshow/5451004.cms
venture to Daiwa for about $10 million, as industry profitability erodes on rising competition and regulatory restrictions, two senior bankers familiar with the matter told ET.
The two-year old venture could provide Daiwa, a cross-town rival of Shinsei, a platform to expand in the financial services in a nation of fast-growing middle class. For Shinsei, which sold real estate in Japan to shore up its finances after losses, it may free up resources from a tiny venture to focus on merging with Aozora Bank.
Daiwa Capital Markets, which had raised funds for Indian mutual funds from Japanese investors, can now offer asset management services on its own. Recently, it hired bankers from Credit Suisse and YES Bank to raise business in equity capital markets, private equity and M&A. It plans to double the investment banking team to 18.
“The deal is almost done, it has to now receive regulatory approvals,” said a person privy to the development. Indian mutual fund industry has been losing charm in the past few months, as regulators are cracking down on what is considered unfair practices to get funds.
The Securities & Exchange Board of India, or Sebi, abolished entry loads on mutual fund investments, slowing inflows for asset management companies. Banks, a major source of assets for mutual funds, have been asked to withdraw their money by the Reserve Bank of India.
Aditya Rattan, country head of Daiwa Capital Markets India, declined comment. “We have no comment on this matter,” said James Seddon, group IR & corporate communications division, Shinsei Bank, in an email response.
If the deal goes through, Shinsei, which manages Rs 448 crore of assets in debt and equity schemes, will be valued at about 10% of assets, comparable with previous deals. L&T Finance last December paid Rs 45 crore to buy DBS Cholamandalam Asset Management, a joint venture between Singapore’s DBS and the Chennai-based Cholamandalam.
Source : http://economictimes.indiatimes.com/personal-finance/mutual-funds/mf-news/Shinsei-Jhunjhunwala-may-sell-MF-business-to-Daiwa/articleshow/5451004.cms
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