NEW DELHI: Yes Bank has agreed to sell its mutual fund business to Prashant Khemka-backed GPL Finance and Investments Ltd. The move comes since the private lender plans to focus on its core businesses, it said in a stock exchange filing. GPL will be acquiring its wholly-owned subsidiaries—YES Asset Management (India) Limited (YES AMC) and YES Trustee Ltd.
“On August 21, 2020, the Bank executed a definitive agreement for the sale of 100% of the equity shareholding of YESAMC and YES Trustee Limited to GPL Finance and Investments Limited,” Yes bank said. It did not, however, disclose the value of the deal and said that the transaction is subject to requisite regulatory approvals.
White Oak Investment Management Pvt Ltd owns 99 per cent of GPL Finance, and the ultimate beneficial holder of the company is Prashant Khemka who owns 99.99 per cent in White Oak, the bank added. Khemka founded his boutique investment management firm White Oak in June 2017. Prior to that, he was the CIO and lead portfolio manager of GS India Equity at Goldman Sachs Asset Management from March 2007-2017.
YES Mutual Fund, had assets under management of Rs 57 crore as of June 2020, down from Rs 2,000 crore in March 2019, showed data from Association of Mutual Funds in India (Amfi). Net losses of the fund house widened from to Rs 16 crore in FY19 from Rs 4.5 crore in FY18.
In FY20, its revenue was just Rs 33 lakh and net worth contribution totalled Rs 49.7 crore, the bank said in its filing. The year 2020 seems to be a black swan year for the Indian mutual fund industry—a severe recession in the economy combined with poor long-term returns in the equity space. After a heady few years of growth, net inflows into equity schemes fell to a four-year low in June 2020. In July, it entered into negative territory at Rs 2,480 crore, according to data from mutual fund industry.