White Oak Capital Management, a boutique investment management and advisory firm set up by former Goldman Sachs executive Prashant Khemka, will acquire the mutual fund arm of troubled private-sector lender Yes Bank.
The bank said in a stock-exchange filing Friday it has signed a pact to sell wholly owned subsidiaries YES Asset Management (India) Ltd and YES Trustee Ltd to White Oak-controlled GPL Finance and Investments Ltd.
Yes Bank said the deal value will be determined at the time of closing the transaction. The deal is likely to be complete in eight to 12 months’ time.
Yes AMC had a net worth of Rs 49.7 crore and revenue of Rs 33 lakh for the financial year ended March 2020.
Yes Mutual Fund is the smallest of India’s 44 mutual funds by assets under management. It had average assets under management of only Rs 56.98 crore for the April-June quarter, according to the Association of Mutual Funds in India.
This is a third of the average AUM of the second-smallest fund house, Shriram Mutual Fund, and a fraction of the average AUM of Rs 3.5-3.6 trillion that market leaders SBI Mutual Fund and HDFC Mutual Fund command.
Yes Bank has been struggling for the past several months as bad loans soared and it failed to raise fresh capital. In March, the bank was rescued by a group of state-run and private-sector lenders under a plan monitored by the Reserve Bank of India and approved by the government. As per the plan, State Bank of India took a 49% stake in the cash-starved lender while ICICI Bank, Axis Bank, Kotak Mahindra Bank, Bandhan Bank and mortgage lender HDFC Ltd also pitched in.
As for Khemka, he set up White Oak Capital in 2017, two months after quitting Goldman Sachs as managing director and chief investment officer of global emerging markets equities.
During his stint at Goldman, Khemka set up an India-focused equity fund in 2006 and oversaw emerging markets assets worth $5.3 billion.
The investment firm’s first India-dedicated debut fund had raised about Rs 1,200 crore (over $150 million) from high-net-worth individuals in 2018.
In April last year, VCCircle reported that White Oak’s second fund is exploring funding opportunities before initial share sales. The closed-ended fund has an investment window of four to five years and would back listed companies.
White Oak also advises London-listed Ashoka India Equity Investment Trust, which mainly invests in securities listed in India and listed securities of companies with a significant presence in India. The fund previously backed HDFC Asset Management Company.