Hemendra Kothari's DSP acquires Blackrock's entire stake in DSP Blackrock
08 May 2018
Hemendra Kothari-promoted DSP Group has aquired US investment corporation BlackRock’s 40-per cent stake in DSP BlackRock Investment Managers, for an undisclosed sum.
DSP BlackRock Investment Managers is a 40:60 joint venture between BlackRock and DSP Group. As of 31 March 2018, DSP BlackRock Investment Managers managed assets worth Rs 86,325 crore, with a 50:50 mix of equity and debt.
Though the deal value has not been disclosed, acquisitions of mutual fund businesses are at 5 - 7 per cent of the asets under management, thus valuing the deal between Rs4,000 crore and Rs6,000 crore.
"As of today, the DSP Group holds a controlling stake in DSP BlackRock Investment Managers and owns 60%" said Hemendra Kothari, chairman, DSP BlackRock Investment Managers in a note sent to investors.
"I am very proud to announce that after all necessary regulatory approvals, DSP group will increase its stake to 100%. Thereafter, we will be renamed as "DSP Investment Managers," the note added.
DSP Blackrock was formed in 2008, with Blacrock's acquisition of Merril Lynch's asset mnagement business. Earlier in 1995, DSP had entered into a joint venture with Merrill Lynch to form DSP Merrill Lynch to provide investment banking, broking, and asset management services.
DSP exited its 57-per cent stake in trances in broking and investment banking in favour of Merrill Lynch, retaining the mutual fund stake.
In the past decade, Daiwa, Deutsche, Morgan Stanley, ING, PineBridge, Nomura, Fidelity, AIG, Zurich, Morgan Stanley, JP Morgan, Goldman Sachs, and KBC have exited the Rs22 lakh crore Indian asset management industry, which has asets under management valued at Rs21 trillion.