Reliance will take over all 12 mutual fund schemes.
By Sreekanth Pookkattil
The Anil Ambani-led Reliance Capital Asset Management (RCAM) declared that it would take over Goldman Sachs’ mutual fund unit in India for $37.5 million.
In the all-cash deal Reliance will take over all 12 mutual fund schemes, including 10 Exchange Traded Fund (ETF) schemes of Goldman Sachs Asset Management India. It is the largest ETF provider in India. Also it has $1.1 billion assets under its management in India
With this, RCAM will become the sole manager of Central Public Sector Enterprises (CPSE) Exchange Traded Funds, which amounts to $334 million.
Through CPSE ETF the government has raised almost $615 million by selling some of its shares in 10 Public Sector Units (PSUs). Goldman Sachs was given the permission to manage CPSE ETF last year.
The boards of both the companies have approved the deal. The transaction is expected to be completed in this financial year itself, if it gets regulatory approval.
RCAM, which is the third largest fund manager in India, manages $23.5 billion assets.
Sam Ghosh, executive director, Reliance Capital, said in a media statement, “This acquisition by RCAM is an important first step in our overall strategy to strengthen our businesses through selective inorganic growth. GSAM India has a strong bouquet of schemes and a talented team. We are confident that together they will complement and enhance RCAM’s overall offerings to our investors.”
Goldman Sachs had entered Indian mutual fund industry by acquiring Benchmark Mutual Fund for $ 18.46 million, in 2011.
Since the financial crisis of 2008 Indian asset managers have been struggling. The industry also witnessed the exit of a number of giant companies, in a few years. Global players such asStandard Chartered, Fidelity, ING Mutual Fund, Deutsche Bank and Morgan Stanley quit India in recent years.