Axis Bank Says Evaluating Partnerships For Asset Management Arm
March 14 2012 - 4:02AM
Dow Jones News
Axis Bank Ltd. (532215.BY) said Wednesday it is evaluating
partnerships in India and globally for its asset management unit
that could add value to its investment management business, but
declined to comment on a report that U.K.'s Schroders PLC (SDR.LN)
may acquire about 30% of Axis Asset Management Co.
"When we are able to identify the right partner, we will assess
the appropriate partnership arrangement," an Axis Bank spokesman
said in an emailed statement.
Schroders declined to comment.
On Wednesday, the Business Standard and the Economic Times
newspapers reported senior executives from asset manager Schroders
are likely to visit Mumbai next week to finalize a deal, which
could help the U.K. company revive its presence in India.
The reports of a tie-up comes at a time of stifled growth for
India's mutual fund industry that managed INR6.82 trillion (about
$137 billion) in assets as of Dec. 31.
In 2009, the capital-markets regulator scrapped the
entry-load--a fee that asset management companies charged investors
buying mutual fund units--and also directed fund houses to
standardize exit-load charges.
Fund houses used a major portion of the entry load to pay
distributors' commissions. After the load was scrapped,
distributors lost the incentive to sell funds, which in turn has
hampered sales of the popular category of equity funds.
Still, the lure of capturing large household savings has
resulted in steady foreign interest in the asset management
segment, as nearly all privately owned general and life
insurers--where 26% foreign ownership is allowed--have overseas
partners. Global majors such as New York Life Insurance Co. and AXA
Asia Pacific Holdings Ltd. have joint ventures in India.
In January, Japan's biggest life insurer, Nippon Life Insurance
Co., said it will buy a 26% stake in Reliance Capital Asset
Management Ltd. for INR14.5 billion.
In 2010, Japan's second largest broker, Daiwa Securities Group
Inc., bought Mumbai-based Shinsei Asset Management Private Ltd. and
Shinsei Trustee Co. (India) Pvt. Ltd., to set foot in India's asset
management business.
Swiss lender UBS AG also recently said it is open to strategic
tie-ups in the asset management segment.
-By Khushita Vasant, Dow Jones Newswires; 91 22 6145 6122;
khushita.vasant@dowjones.com