Shroders takes 25 per cent stake in Axis Mutual Fund

Britain's largest asset management company Schroders has taken a 25 per cent stake in Axis Mutual Fund, promoted by Axis Bank, for an undisclosed amount. The deal would give the Indian fund house access to Schroders' global distribution network and advise overseas funds invested in Indian securities.

According to a report in The Economic Times of 14 March, Schroders Investment Management was in discussions with Axis Bank for acquisition of a stake in the mutual fund arm. The deal would allow Schroders to have one board member each on the AMC's board and Axis Mutual Fund trustee company.

Schroders Investment Management is a UK-based firm managing $291 billion worldwide and had applied to the Securities and Exchange Board of India (Sebi) in April 2008 to start a mutual fund business in India. It did not, however, secure a licence till last year. Axis Mutual, which started operations in 2009, holds equity assets worth Rs640 crore. The fund's total assets under management (AUM) stood at Rs8,815 crore as of 31 March 2012.

According to Rajiv Anand, managing director and CEO of Axis Mutual Fund, the deal valuation was in line with other deals struck during the year.
It would help promote its fund products globally through Schroders' distribution network, he said, adding, Schroders would also bring its products to India.

Industry sources said the Schroders deal would help Axis Mutual rebrand itself as an investment manager. According to industry players, till now Axis MF was regarded only as a minor offshoot of a large bank.

With tough business conditions, Indian fund houses are striking partnership deals with stronger foreign institutions that could offer advisory and investment mandates. January saw, Japan's Nippon Life Insurance buy a 26 per cent stake in Anil Ambani-controlled Reliance Capital Asset Management, India's second-largest mutual fund in assets, for roughly Rs1,450 crore.