Another foreign AMC exits India

Mumbai: JP Morgan Asset Management would sell its onshore India-based mutual funds business, including its fund of funds (funds investing overseas), to Edelweiss Asset Management.

JP Morgan is the seventh foreign sponsored fund house to exit the Indian asset management business in the last three years. The total asset managed by JP Morgan is four times higher than the assets managed by Edelweiss AMC.
Though the companies did not reveal the deal size, citing confidentiality, market sources said the JP Morgan netted Rs 110 crore from the deal.

As of December 31, 2015, JP Morgan’s asset under management (AUM) stood at Rs 7,081 crores while that of Edelweiss AMC stood at Rs 1,676 crore. Post acquisition, the assets under management (AUM) of the combined entity would be Rs 8,757 crore. This move will strengthen Edelweiss Group’s global asset management businesses, which include the group’s existing mutual fund business, credit alternative funds, offshore funds and equity funds.

Along with the schemes, Edelweiss said it is committed to absorbing majority of JP Morgan MF staff ensuring business continuity as well as a platform for enhan-ced growth.

“Most of the foreign sponsored fund house have their own business dynamics and may not be fitting well into their overall game plan. Lot of these funds have found it difficult to scale up their assets and distribution channels. They will stay in the business only if they foresee strong growth in AUM,” said Dhirendra Kumar, chief executive officer, Value Researchonline, a mutual fund tracking firm.