MUMBAI: Kotak Mahindra Asset Management Co, said it plans to acquire domestic schemes of PineBridge Investments Asset Management Co.
Kotak AMC had as of August 31, 2014 funds under management of Rs 37,000 crore compared with PineBridge Investment’s Rs 660 crore. During April-June 2014 the average AUM of Kotak AMC was Rs 35,520 crore, while PineBridge has Rs 635 crore.
While the acquisition by Kotak is not so large, it reconfirms the trend towards a consolidation in the industry as not many smaller players are making profits or even breaking-even.
Twenty five of the 46 mutual funds had assets under management of less than Rs 10,000 crore, 14 of which had AUM of less than Rs 1,000 crore AUM average during April-June 2014, according to data on AMFI website.
Consolidation has been underway gradually in the industry. The last acquisition was of funds of Morgan Stanley Mutual Fund by HDFC Mutual Fund late last year.
“We have agreed to acquire the schemes of PineBridge MF,’’ said Gaurang Shah, President - Asset Management, Life Insurance and International Business, Kotak Mahindra Bank Ltd. “The assets included are equity oriented which provides a further enrichment to our equity base. We have an appetite for further acquisitions which can create value for us and we would be keen to consider such opportunities.’’
In the past few years, Birla Sun Life AMC acquired funds of ING Investment Trust, SBI Mutual acquired schemes of Daiwa Mutual Fund and L&T Mutual Fund acquired funds of Fidelity India. Consolidation could be the only way for asset managers and investors to get the best out of their funds.