Religare Enterprises, with the loads of money its promoters got from selling their Ranbaxy stake to Daiichi Sankyo has now acquired 100% of Lotus India Mutual Fund from Temasek-promoted Alexandra Fund Management and Sabre Capital for an undisclosed amount.
The acquisition is done by the recently formed company Religare Aegon AMC which is a JV between Religare and Netherlands based Aegon Group.
Lotus MF was not a well performing mutual fund in India as it has been making losses since inception in 2005 and has 90% of its assets in debt products making it a relatively passive AMC. As on October 31, 2008, its total assets under management were Rs 5,500 crore in 19 schemes.
In previous deals, valuation of AMC is done at 5-6% of AUM thereby valuing Lotus AMC at around Rs. 300 crores, however this figure could be lower as debt assets command lower valuations.
With the acquisition, Religare would immediately get a customer base to start their AMC and also get hold of 60 offices situated around the country. However, it is highly likely that these offices would be merged with the existing Religare offices to bring in more efficiency in operations.
Find this article at: http://www.labnol.org/india/corporate/religare-acquires-lotus-mutual-fund-to-kickstart-their-mutual-fund-business/5208/
Tags: merger, mutual fund, takeover, Corporate, India
