Within a year of commencing operations in India, Japan’s Shinsei Bank Limited is selling out its entire stake in Shinsei Asset Management Company (India), that manages Shinsei Mutual Fund (MF), to another Japanese financial group Daiwa Securities Group (Daiwa Securities
Group Inc and Daiwa AMC).
Sanjay Sachdev, head of Shinsei Asset Management, has decided to quit after the deal which gives Japan’s second largest asset management company with over $100 billion of AUM a foothold in the world’s second fastest growing economy. The rest of the team is expected to remain unchanged after the acquisition.
Shinsei Bank owns 75% stake in the firm with ace investor Rakesh Jhunjhunwala holding 15% the balance with an entity called Freedom Financial Services (owned by Sanjay Sachdev). As per the agreement, all existing shareholders are selling out to Daiwa.
Shinsei MF got approval to begin operations in February 2009 and its first fund was launched in June 2009. Currently it has three active funds – Shinsei Industry Leaders, Shinsei Liquid and Shinsei Treasury Advantage Fund.
Although the deal value was not disclosed, it reportedly was Rs 49.7 crore, around 11% of the assets under management. Shinsei MF managed assets worth Rs 460 crore, according to the latest data.
This is much above what IDFC paid to acquire Standard Chartered MF for Rs 831 crore at 5.7% of the assets. In November 2008, Religare took over Lotus MF for an undisclosed sum but was believed to be pegged just around 2% of assets under management.
Shinsei is said to have invested over $150 million (Rs 680 crore) in India through its proprietary fund including an investment in the State Industrial Corporation of Maharashtra besides a hotel venture.