Sundaram AMC to buy Principal's core businesses for undisclosed sum

Principal Asset decided to exit the asset management business in India

Sundaram Asset Management Company (Sundaram), a 100 per cent subsidiary of Sundaram Finance Ltd, has announced the purchase of the core businesses of Principal Asset Management Pvt Ltd. Value of the transaction is around Rs 338.53 crore.
 

Sundaram will acquire the schemes managed by Principal Asset Management Pvt Ltd and acquire 100 per cent of its share capital, along with that of Principal Trustee Company Pvt Limited, and Principal Retirement Advisors Pvt Ltd. 

The transaction is subject to the receipt of necessary regulatory approvals and Sebi prescribed processes, and Principal will continue to operate the businesses until the deal is closed.

Sundaram is a leading player in the fund management space with a 25-year track record. It has over Rs 40,000 crore in assets under management, the majority of which are in equity-oriented schemes.

Principal Asset Management had assets under management of Rs 7,447 crore as on December 31, 2020 with about 90 per cent in equity-oriented schemes.

 

Sunil Subramaniam, Managing Director, Sundaram Asset Management said that the transaction will strengthen the company's presence in the marketplace with the addition of a range of schemes wilh a good long-term performance track record across the large and mid-cap segments. This will complement its business which has traditionally been weighted towards the mid-and small-cap segment.

Pedro Borda, COO, Principal International said, "As part of a systematic review of the company's portfolio of businesses and global market dynamics, we've made the decision to exit the asset management business in India. As we transition the business. customers and distributors will remain our top prioriry' We believe they will benefit from Sundaram Asset Management's larger mutual fund platform in this market."

T T Srinivasaraghavan, Managing Director, Sundaram Finance, said the acquisition is a natural step in the group's aspiration to become a sizeable player in the asset management industry. "We will be able to leverage the combined platform to derive significant synergies. The focus for us will be on delivering a better experience to our investors and distribution partners," he added.