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JM Financial Mutual Fund, the asset management arm of Nimesh Kampani-promoted JM Financial, has sold 12 per cent stake to three hedge fund investors for Rs 111.7 crore or $26.5 million. The three investors — Valiant Capital Partners, Blue Ridge Capital and Eton Park — have picked up 4 per cent each for about Rs 151 per share in the mutual fund. The total deal size is Rs 111.7 crore, valuing the company at Rs 931 crore, reports Reuters, quoting JM Financial Group Director Vishal Kampani.
The company plans to use the capital to expand and increase its distribution muscle across India, the report added. A non-binding term sheet agreement has been signed between the AMC and the investors subject to signing of definitive agreements and regulatory approvals. This divestment from JM Financial is a forerunner to JM’s plans for international funds. It plans to launch a Singapore or Mauritius headquartered offshore fund by next year and would be working in close connection with these investors to launch the fund.
Past Mutual Fund Deals
In March, Standard Chartered sold its Indian asset management business to Infrastructure Development Finance Co for $205 million, valuing the firm at about 6 percent of its assets under management. In December, Reliance Capital sold about 5 percent of its fund unit for Rs 500 crore, valuing India’s largest fund firm at 13 percent of total assets.
In October 2007, Pioneer Investments picked up a 51 per cent stake in Bank of Baroda’s Asset Mangement company. In 2006, Canara Bank sold 49 per cent stake in its asset management subsidiary Canbank Investment Management Services to the Netherlands-based Robeco Group NV. Robeco is part of Rabobank. In 2004, SBI divested 37 per cent its mutual fund arm to Societe Generale.
UTI Asset Management, India’s second largest mutual fund group, has also been looking to bring in an international investor in the firm in a pe-IPO deal. The usual suspects Goldman Sachs, Lehman Brothers, Warburg Pincus, Singapore’s sovereign wealth fund GIC and a new investor like Japan’s Shinsei Bank were believed to be in the race for picking up 10-12 per cent stake in the company for about $200 million.
Japanese fund manager Nomura Asset Management evinced sufficient interest to pick up a stake in LIC MF Asset Management Company which manages LIC Mutual Fund.