Mutual Fund News : Sundaram Mutual Fund announces acquisition of Principal Mutual Fund

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In a latest development Sundaram Asset Management Co. Ltd. has announced acquisition of the asset management business of Principal Asset Management Pvt. Ltd.

With this Sundaram Mutual Fund will acquire the schemes managed by Principal AMC. It will acquire 100% of the share capital of Principal AMC, Principal Trustee Company Pvt. Limited and Principal Retirement Advisors Pvt. Ltd.

The deal is subject to the receipt of necessary regulatory approvals and SEBI prescribed processes.

Principal AMC will continue to operate the businesses and manage its current schemes till the time the deal is closed.

The fund houses will ensure that there will be no disruption of service to the investors in the interim. Both the fund houses aim for a seamless transfer once approval is obtained.

Sundaram AMC manages assets of over Rs. 40,000 crores, the majority of which is in equity-oriented mutual fund schemes. As on December 31, 2020, Principal AMC had an AUM of Rs. 7,447 crores with about 90% of it in equity-oriented schemes.

In a press release, Mr Sunil Subramaniam, Managing Director, Sundaram AMC said, “This transaction will strengthen our presence in the marketplace with the addition of a range of schemes with a good long term performance track record across the large and mid-cap segments. This will complement our business which has traditionally been weighted towards the mid- and small-cap segment.

Mr Pedro Borda, chief operating officer, Principal International said, “As part of a systematic review of the company’s portfolio of businesses and global market dynamics, we’ve made the decision to exit the asset management business in India. As we transition the business, customers and distributors will remain our top priority. We believe they will benefit from Sundaram Asset Management’s larger mutual fund platform in this market.

After the deal, Sundaram Mutual Fund will overtake Edelweiss AMC and Invesco AMC in terms of AUM to become the 15th largest AMC in the Indian Mutual Fund industry.