| Deal values ADAG firm at over Rs 10,000 crore
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| Eton Park, the US-based global multi-strategy investment organisation, has bought 5 per cent equity in Reliance Capital Asset Management. (RCAM), the wholly-owned mutual fund arm of Reliance Capital, for Rs 501 crore. The deal values the Anil Ambani-controlled AMC at over Rs 10,000 crore.
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| The proposed investment values RCAM at around 13 per cent of its assets under management (AUM).
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| This is much more than the recent M&A deals in the MF industry. For example, Rebecco Group picked up 49 per cent stake in Canbank Mutual Fund at a valuation which was around 10 per cent of the AUM and UBS bought Standard Chartered MF at 5 per cent of the AUM.
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| “The RCAM valuation translates into a price of Rs 400 per share of Reliance Capital,” said a statement issued by Reliance Capital. The proceeds of the transaction will be utilised by RCAM for its domestic and international expansion.
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| When contacted, Reliance capital executives said the AMC is already operating in 300 cities across India and is planning a big push in more Tier II and Tier III towns. Besides, it plans to tap the non-resident Indians in several cities in the US, UK and Singapore through more outlets in these countries.
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| Reliance Capital AMC manages Rs 77,764 crore (as on November) and is the top fund house in terms of AUM.
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| The transaction is subject to completion of definitive documentation and necessary approvals, if any, and is expected to close in January.
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| Vikrant Gugnani, president and CEO of Reliance Capital Asset Management, said, “We welcome Eton Park as a respected long term institutional investor, and value this association, given Eton Park’s significant global presence in financial markets.”
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| Eton Park is a global, multi-disciplinary, team-oriented investment organisation, dedicated to delivering superior risk-adjusted returns over a multi-year period.
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| Eton Park currently manages over $10 billion through its offices in New York, London and Hong Kong.
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| The investment by Eton Park comes at a time when a host of global AMCs have announced their entry into the Indian mutual fund space.
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UTI Mutual Fund, the country’s oldest mutual fund, is also expected to sell 20 per cent stake to strategic and financial investors ahead of its proposed IPO early next year.
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| CAPITAL BOOST
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Valuation at 13% of assets under management
AMC valuation translates into Rs 400 per Reliance capital share
Equity proceeds to be utilised for domestic & international expansion
Planning to tap the NRIs in the US, the UK and Singapore |
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