Anil Ambani-controlled Reliance Capital Ltd’s asset management arm has entered into a strategic partnership with Samsung Asset Management Co Ltd, South Korea’s largest asset management company, to distribute each other’s products and explore other opportunities, the company said.
Samsung Asset Management is the asset management arm of Korean-Chaebol Samsung Group and manages assets of over $165.8 billion as of February 2015 across an array of investment products, ranging from domestic and overseas equities, fixed income, alternative investments, hedge funds and exchange traded funds.
As part of the strategic pact, the two companies will explore opportunities for developing, managing, marketing and distributing each other’s products in India and South Korea and pursue their interests in the global markets.
“India is one of the biggest economies in the world with strong growth potential in the mutual fund market and, with this relationship, both firms will seek to explore business opportunities in active strategies and ETF business, leveraging both firms’ experiences and know-how in the respective market,” said Samsung Asset Management.
Samsung Asset Management has its overseas subsidiaries in Hong Kong and the US and plans to acquire Samsung Life’s London subsidiary within this year. It has over 51 per cent market share in ETF across 16 ETF managers in Korea (as of August 2014).
RCAM is part of the public-listed Reliance Capital, the flagship financial services company under Anil Ambani-led Reliance Group. RCAM is one of the largest asset managers in India, managing Rs 2,18,338 crore ($36 billion) as on September 30, 2014, across mutual funds, pension funds, managed accounts, etc.
It already has strategic tie-ups with financial services giants, including Japan’s Nippon Life Insurance Company for its insurance and mutual fund businesses, among others.
In November, Nippon Life agreed to raise its stake holding in RCAM to 49 per cent from 26 per cent in two or more tranches. The transaction pegs Reliance Capital Asset Management’s valuation at Rs 7,300 crore ($1.2 billion). The Japanese insurer already owned 26 per cent stake in RCAM and Reliance Life Insurance Company for which it invested $290 million and $680 million in 2012 and 2011, respectively.
The deal between Nippon and Reliance was an extension of their existing partnership in the financial services domain. Nippon had previously struck a deal to acquire 26 per cent in Reliance Life Insurance Co Ltd for Rs 3,062 crore ($680 million), valuing it at approximately Rs 11,500 crore ($2.6 billion). Thereafter, the partners had said that they intended to expand the scope of their existing business partnership to other financial services, such as asset management.
Reliance Capital Ltd scrip was up over 0.24 per cent and was quoting at Rs 423.85 a share on the BSE at 11:30 AM on Friday in a weak Mumbai market.
(Edited by Joby Puthuparampil Johnson)