Sundaram Asset Management Company in India is set to acquire the asset management businesses of Principal Asset Management for nearly INR3.38bn ($46.34m).

As agreed, the company will acquire 100% of the share capital of Principal Asset Management, Principal Trustee Company and Principal Retirement Advisors.

As of 31 December 2020, Principal Asset Management had assets under management of INR74.47bn ($1.02bn), with around 90% of it in equity-oriented schemes.

Sundaram Asset Management Company managing director Sunil Subramaniam said: “This transaction will strengthen our presence in the marketplace with the addition of a range of schemes with a good long term performance track record across the large and mid-cap segments.

“This will complement our business which has traditionally been weighted towards the mid-and small-cap segment.”

Principal International COO Pedro Borda said: “As part of a systematic review of the company’s portfolio of businesses and global market dynamics, we’ve made the decision to exit the asset management business in India.

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“As we transition the business, customers and distributors will remain our top priority. We believe they will benefit from Sundaram Asset Management’s larger mutual fund platform in this market.”

The completion of the transaction is subject to SEBI and other regulatory approvals. Until then, Principal Asset Management will continue to operate the business.

Established in 1996, Sundaram Asset Management Company is a subsidiary of Sundaram Finance and has around INR400bn in assets under management.

It manages assets across mutual funds, portfolio management services, alternate investment funds and global funds and advisory mandates.