Religare to acquire Macquarie’s stake in wealth management joint venture

Religare Enterprises Ltd (REL) is ending its six-year old wealth management joint venture through acquisition of the stake held by its partner Macquarie Group Ltd in Religare Macquarie Wealth Management Ltd. The transaction value is not disclosed.

The equal partnership JV with the Australia-headquartered diversified financial services company, Macquarie was formed in 2007 to serve the growing Indian high-net-worth individuals (HNIs) client base, through leveraging Religare’s local knowledge and Macquarie’s global expertise.

The decision to acquire Macquarie’s stake in its wealth management joint venture was announced after market hours. Religare Enterprises’ scrip closed at Rs 338.3, up 5.13 per cent in a strong Mumbai market on Monday.

The JV currently has close to Rs 2,800 crore of assets under management (as on March 31, 2013) servicing over 4,800 clients through its wealth advisors.

Post completion of the transaction and necessary formalities, the legal entity will be rechristened as Religare Wealth Management Ltd (RWML) and will form a part of the broader Capital Markets Business of Religare group. There will be no change in the management team and the operational team will report to Basab Mitra, CEO – Capital Markets and Wealth Management for Religare group.

Commenting on the development, Shachindra Nath, Group CEO, REL said, “Macquarie has decided to exit the wealth management business from Asia, including India, and this has created for us the opportunity to consolidate our financial services platform in India. We see this new structure as a great growth enabler for the business by bringing together the broader Religare ecosystem, including distribution, pan-India client base and research capabilities, under a common umbrella.”

REL is present across a suite of financial services, including asset management, life and health insurance, lending, broking, investment banking and wealth management. The firm, which is among the 26 firms that applied for banking licence, is also building an Asia- and emerging markets-focused institutional equities and investment banking business and a global asset management platform.

Two month ago, Customers Bancorp Inc (CUBI) entered into a definitive agreement to acquire 5.9 per cent stake in REL. Early this year REL, through one of its subsidiaries, acquired PN Vijay Financial Services Pvt Ltd to expand its asset management business besides boosting the portfolio management services and mutual funds advisory units.

(Edited by Joby Puthuparampil Johnson)

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