Religare and Dutch financial services major Aegon have decided to part ways in their asset management joint venture in India, Religare Aegon Mutual Fund. This comes barely a month after the firm received regulatory nod to commence business.

Though some reports suggest the partners decided to go separate ways following the acquisition of Lotus Mutual Fund, others hint at the deal where Religare Enterprises acquired London-based brokerage Hichens Harrison as it translated into a conflict of interest between the partners in the European market.

In a statement issued by the company, "Religare and Aegon have announced restructuring plans relating to their partnership for the asset management business in India. These changes have been driven by the new business opportunities which have arisen in the Asia Pacific region and the desire of each partner to achieve their strategic goals in the asset management area in the region."

"Under the revised structure proposed to the regulators Lotus Mutual Fund, (recently proposed to be acquired by Religare) would be rechristened as Religare's asset management business in India and Aegon would assume control of Religare Aegon Mutual Fund, which is currently the joint venture between the two parties. Both Religare and AEGON are firmly committed to building globally scaleable businesses of excellence. This rearrangement is subject to SEBI and other approvals," the statement said.

According to this BS report, the Lotus India Mutual Fund deal may have also contributed to the split of the JV as the deal was pushed solely by Religare. Moreover, Aegon is said to have observed that the acquisition of Lotus will affect its plan to launch an offshore fund in India as Fullerton(a Temasek group firm and the promoter of Lotus India Asset Management Company), already runs an offshore fund called Fullerton Sabre Lotus India fund.

However, Religare Enterprises(now the flagship business of Malvinder and Shivinder Sigh who sold off their pharma firm Ranbaxy to Daiichi Sankyo) was not ready to let go of the opportunity to buy Lotus as apparently it got a bargain deal.

The break-up of the asset management JV, however, will not affect the life insurance JV between Religare and Aegon. In this venture Religare holds 44% stake while Aegon has 26%, as per the maximum permissible FDI limit. Media house Bennett Coleman & Co Ltd(BCCL), through its private treaties wing(which sells ad space for equity) owns the remaining 30% stake in the life insurance venture.

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