Singapore-based investment management company Manulife has bought a 49% stake in the asset management arm of Mahindra Finance, marking yet another collaboration between an Indian financial company and a foreign asset management company for operations in India.
The transaction has been structured as an investment of $34.9 million, or about Rs 2,000 cr, into the equity base of Mahindra Asset Management Company Private Limited by the Singapore-based firm.
With this, Mahindra & Mahindra Financial Services’ stake in the asset management unit will fall to 51%, with Manulife holding the remaining 49%.
While Mahindra Asset Management has around Rs 5,000 cr of assets under management, Manulife is a global giant with over US$ 849 billion under management and administration as of March.
Manulife primarily operates as Manulife globally and as John Hancock in the United States, providing wealth and asset management and life insurance solutions for individuals, groups and institutions.
Mahindra Asset Management has over 1.6 lakh customer accounts from 400 cities and empaneled distributors.
“Manulife’s asset and wealth management experience extends over 150 years and they have enjoyed successes across emerging and developed markets,” said Ramesh Iyer, Vice-Chairman & Managing Director, Mahindra Finance.
“We welcome Manulife as a strategic partner, to further drive our efforts at increasing mutual fund penetration in India and driving positive change.”
Mahindra Finance, which is a strong name in vehicle and consumer finance in India, said it hopes to take advantage of Manulife’s global wealth and asset management capabilities and experience to expand the asset management business.
“Manulife Asset Management fits as the right strategic partner for Mahindra Asset Management as they bring an enormous pool of fund management talent, backed by global best practices and processes. Manulife’s on the ground experience in global emerging markets will help to cater to the needs of the developing Indian retail fund market,” said Ashutosh Bishnoi, MD & CEO, Mahindra Asset Management Company.
He said Mahindra Asset Management, which currently offers 9 different investment schemes, wants to move beyond traditional markets to expand its footprint.
Mahindra Finance has over 1,300 offices and reaches out to customers spread over 360,000 villages and 7,000 towns across the country, and intends to leverage its reach and customer base to grow the mutual fund business.
“Mahindra & Manulife share a common vision of building a market leading asset management business, servicing the needs of retail investors and becoming one of India’s most admired asset management companies,” the company said.
At the end of 2018, Manulife had more than 34,000 employees, over 82,000 agents, and thousands of distribution partners, serving almost 28 million customers.
“We are very excited to be partnering with Mahindra to bring our experience to Indian consumers and further extend our global footprint,” said Michael Dommermuth, Head of Wealth and Asset Management, Manulife Asia.