Edelweiss acquires JP Morgan's India MF biz

MUMBAI: Home-grown financial services major Edelweiss on Tuesday said that it was buying the Indian assets management business of global financial powerhouse JP Morgan, which managed a portfolio worth nearly Rs 7,100 crore. Although the two financial services firms didn't disclose the deal amount, market sources said that it was done for less than Rs 100 crore.
Currently, Edelweiss MF manages assets worth nearly Rs 2,000 crore under its India business and about Rs 31,000 crore under its overall global assets management business.
The merger of JP Morgan Mutual Fund with Edelweiss MF is subject to regulatory approvals, releases from the two fund houses said. "Along with the schemes, Edelweiss is committed to absorbing a majority of JP Morgan MF employees, ensuring business continuity as well as a platform for enhanced growth across the Edelweiss Group," the release from the Indian financial service group said.
Fund industry players said that at a valuation of sub-Rs 100 crore, Edelweiss has got a very good deal. "Maybe it was possible because it is also absorbing most of the employees of the JP Morgan fund, which will also ensure a smooth merger process," said a top official with another fund house.
In the last few years, several of the global financial majors have sold off their India mutual fund business. The list includes Goldman Sachs, Morgan Stanley and Deutsche Bank.
According to Rashesh Shah, chairman, Edelweiss Group, the acquisition is aimed at growing its India business. "Given the complementary business advantages and the significant business that JP Morgan MF has built, this acquisition is a natural win for both. There will be planned investments into the business in terms of products, technology, distribution and a clear strategy to compound growth," Shah said. According to Nitin Jain, CEO, global asset and wealth management, Edelweiss Group, the complete integration between the two fund houses will take 12-18 months.
After the exit of its mutual fund business in the country, JP Morgan will continue to offer investment strategies here through its offshore India equity investment business, which is based in Hong Kong. Additionally, it will continue to operate its global real assets investment business in India, a release from the firm said.