The world’s largest asset manager BlackRock Inc. is all set to sell its 40% stake in DSP BlackRock Investment Managers Pvt. Ltd. to joint venture partner DSP Group, adding to the club of foreign asset managers that have left from Indian fund industry.
As far as sources are concerned, DSP Blackout Investment Manager is currently valued at Rs. 5000 crores. A person familiar with the matter on the promise of anonymity said,
As of now, BlackRock is exiting the JV. BlackRock has been in talks with DSP for about a year and initially, they were interested to buy DSP’s 60% stake. DSP rather chose the option of retaining its footprint in India.
The world’s largest asset manager in-houses around $6.32 trillion in assets worldwide. It is a 40:60 joint venture between BlackRock and DSP Group which is headed by Hemendra Kothari, who started his career with family firm D.S. Purbhoodas & Co before founding financial services firm DSP Financial Consultants in 1975.
Post-split, the fund will be called as DSP Mutual Fund subject to regulatory conditions.
India has witnessed exit of several foreign players from mutual industry in the last 10 years. This includes a long list of prominent names such as Zurich, Morgan Stanley, JP Morgan, Fidelity, Nomura, Daiwa, ING, PineBridge, Deutsche, KBC and Goldmann Sachs.
Currently, there are about 43 fund houses in India which manage AUM of Rs. 22 lakh crore where the top control more than 80 percent of the assets. The small players, as well as global majors, have been sustaining losses in recent years forcing their entry out of the industry.
Moreover, Market Regulating Body in India, SEBI is also making it tougher for asset managers to charge high fees. A few years ago SEBI had banned entry loads preventing funds from charging a fee to investors buying into schemes.