US co buys stake in IDBI MF

MUMBAI, SEPT 15: The Principal Financial Group The Principal of the USA will acquire 50 per cent equity stake in IDBI Mutual Fund. Indu...

MUMBAI, SEPT 15: The Principal Financial Group The Principal of the USA will acquire 50 per cent equity stake in IDBI Mutual Fund. Industrial Development Bank of India IDBI has entered into a memorandum of understanding MoU with the US firm for 50 per cent shareholding in IDBI Investment Management Company Ltd IIMCO, presently a 100 per cent subsidiary of IDBI. IIMCO is the asset management company that manages various schemes of IDBI Mutual Fund.

ICICI Mutual Fund had earlier sold part of the stake held by JP Morgan in ICICI Mutual Fund to Prudential of the UK. IDBI and the Principal group will enter into a shareholders8217; agreement within the next few months and develop a detailed business plan to set the understanding between them on management and operating procedures, introduction of new products, strategies for marketing, investment and management of funds, said G P Gupta, chairman and managing director, IDBI.

Gupta said that the proposed joint venture JV is expected to capitalise onretail opportunities to develop, strengthen and expand the business of IIMCO through the introduction of new technology and products. IIMCO will draw upon the global expertise of the Principal group for developing products and systems catering to small, medium and large enterprises as well as individual investors.

The Principal group has core competence as a full service provider, including fund management and strong administrative capabilities, which would enable the JV to provide the Indian investors with a unique blend of Indian and international expertise.

IDBI8217;s established retail distribution network is also expected to support the JV, which is planning to expand its business portfolio by introducing new products like venture capital funds and private equity business.

Gupta said IDBI was planning to induct partners in some of its other businesses as well, like IDBI Capital Management Services ICMS as well as merchant banking activities.