GIC Housing Finance Ltd will buy a stake of up to 16 per cent held by Nomura Asset Management in the Japanese company’s mutual fund joint venture with Life Insurance Corporation and the state-run firm’s mortgage lending arm.
The move by GIC Housing, a listed firm co-promoted by five state-run general insurers, gives a full exit to the Japanese company from the mutual fund JV.
GIC Housing said in a stock exchange filing it will buy up to 16 per cent each of LIC Nomura Asset Management Company and LIC Nomura Mutual Fund Trustee Company for Rs 22.68 crore and Rs 1.26 lakh, respectively.
The deal comes a fortnight after LIC Housing Finance Ltd announced it was buying a 19.3 per cent stake in the AMC and trustee company from Nomura. The Japanese company had entered into a joint venture with India’s largest insurer for the mutual fund business in 2011.
Before these deals, Nomura owned a 35 per cent stake each in the two companies while LIC Housing held 16 per cent and 20 per cent in the trustee company and the AMC, respectively. LIC owns 49 per cent in the trustee company and 45 per cent in the AMC.
LIC Nomura Mutual Fund had Rs 11,156.65 crore in average assets under management for the quarter ended September 30, making it the 19th largest player among 44 mutual fund houses in the country.
The twin deals this month values it at just 1.2 per cent of AUM, way lower than industry average. Japan’s Nippon, which had inked a deal with Reliance Capital Asset Management to raise its share by 14 per cent to 49 per cent in October, had valued the Indian company at 3.51 per cent of AUM.
LIC Nomura MF had undergone drastic changes this year, appointing a new CEO, CIO and COO and hiring experts to ramp up business and take on competition.
It had named Sarojini Dikhale, senior executive director at LIC, as its CEO in July after Nilesh Sathe moved to the Insurance Regulatory and Development Authority of India as a whole-time member.
The year saw several foreign investors such as Goldman Sachs and Deutsche Asset Management selling their stakes in local AMCs. Meanwhile, Religare Global Asset Management sold its entire stake to Invesco in November while Nippon Life Insurance Co hiked its stake in Reliance Mutual Fund to 49 per cent.