SBI Mutual Fund (SBI MF) has agreed to buy all of the existing India domiciled fund schemes of Daiwa Mutual Fund (Daiwa MF).
SBI Mutual Fund, a joint venture between State Bank of India and French asset management company AMUNDI, has taken over the sponsorship, trusteeship, management and administration of all the schemes of Daiwa MF.
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Managing director and chief executive of SBI MF, Deepak Chatterjee, said: "We cannot disclose the valuation of the deal."
The transaction couldn’t be compared to other deals, as this was a takeover of existing schemes, not buying out the asset management company," he added.
If the estimated valuation holds, the deal size would be INR2.6 crore (US45.2 million) to INR4 crore.
The deal’s low valuation is due to the fact that Daiwa has high proportion of debt assets. Currently, it has 8 schemes, out of which 6 are into debt and rest in equities.
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By GlobalDataThe deal is currently subject to receipt of regulatory approvals and will help SBI MF acquire a unique client base which will increase its penetration in retail and HNI space.
Upon the completion of the transaction, all existing schemes of Daiwa MF will become schemes of SBI MF and all existing unit holders of schemes of Daiwa MF will become unit holders of SBI MF.
The deal will expose the schemes to the investment and risk management processes as well as the best practices of the SBI group.
As on March 2013, Daiwa MF managed average assets worth INR 266.12 crore, while SBI MF in India with average assets of INR54,905.44 crore ($10,096.5 million).
