Canadian financial services group Manulife has agreed to take a 49% stake in the asset management arm of Mahindra & Mahindra Financial Services Ltd for $35 million (Rs 243.4 crore).
Toronto-based Manulife will make the investment in Mahindra Asset Management Company Pvt. Ltd and Mahindra Trustee Company Pvt. Ltd, the diversified Indian conglomerate said in a statement.
Mahindra & Mahindra Financial Services Ltd, which operates as Mahindra Finance, will retain a 51% stake in the asset management company.
This is the third transaction by a Mahindra group company with a foreign partner this month. On June 3, Canadian pension fund CDPQ picked up a 1.76% stake in Mahindra & Mahindra Ltd, the group flagship, for Rs 1,424.56 crore ($205.6 million). The same day, Japanese conglomerate Mitsui & Co. Ltd agreed to acquire a 49% stake in Marvel Solren Pvt. Ltd, a unit of the Mahindra Group’s clean-technology arm Mahindra Susten Pvt. Ltd.
The deal will help Mahindra AMC expand its fund offerings and retail fund penetration in India. It will also combine Mahindra’s domestic market strength with Manulife’s global wealth and asset management capabilities.
The Canadian company primarily operates as Manulife globally and as John Hancock in the United States. It had assets under management and administration of over $849 billion as of March 31.
Mahindra AMC offers nine investment schemes. It has annualised average assets under management at Rs 5,019 crore. It has 1.6 lakh customer accounts from 400 cities, and about 11,000 distributors.
“Mahindra and Manulife share a common vision of building a market-leading asset management business, servicing the needs of retail investors and becoming one of India’s most admired asset management companies,” said Ramesh Iyer, vice-chairman and managing director at Mahindra Finance.
Other recent deals in the segment include Reliance Capital Ltd, the financial services arm of Anil Ambani-led Reliance Group, exiting the mutual fund business by selling its entire stake in Reliance Nippon Life Asset Management Ltd (RNAM) in order to pare debt.