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| Bajaj partners Allianz for mutual fund business |
| BS Reporter / Mumbai Apr 21, 2009, 00:44 IST |
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 Bajaj FinServ, the financial services arm of the Bajaj Group company, has said that it would get into the asset management business with its insurance business partner Allianz.
According to an announcement made here today in this regard, the German partner would hold a majority 51 per cent in the new venture, while the auto-to-financial services diversified group would hold the rest.
“We would like to leverage our existing distribution network for the new business,” said Rahul Bajaj, chairman of Bajaj FinServ. “We would like to utilise the fund on an arm’s length basis, within the regulatory limits,” he added.
“For us, distribution is important. That is why we have partnered with Bajaj,” said A Douglas Eu, chief executive officer, Allianz Global Investors Asia Pacific.
The company has applied to the equity markets regulator Securities and Exchange Board of India for a licence to start mutual fund business. It takes about six to eighteen months for the regulator to grant its approval.
Bajaj already has a captive fund of about Rs 22,000 crore from its insurance business and other group companies. Allianz has minority stakes in both Bajaj insurance ventures – Bajaj Allianz Life Insurance Company and Bajaj Allianz General Insurance Company. Joachim Faber, a board member of the German company, said that Allianz would like to increase its stake in the insurance businesses in India as and when regulations permit it.
The Bajaj-Allianz tie-up for mutual fund business comes even though Goldman Sachs deferred plans to start MF operations in India, and many more are going slow. South Korea’s Mirae Asset and France’s Axa are the other foreign players who have entered the Indian mutual fund industry in last two years. Regulations do not require foreign players to have an Indian partnership in the mutual fund industry.
Assets under management for India’s 35-member mutual fund industry fell at the end of last financial year to $83 billion from $100 billion a year ago, as a result of the credit crunch and a downturn in equity markets. Retail investors have turned wary due to the loss of valuations.
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