Dewan Housing Finance Corporation (DHFL) on Tuesday announced that it was exiting from the mutual fund (MF) industry by selling its 50 per cent stake in DHFL Pramerica MF to its joint venture partner Pramerica.
According to the press release, “Pramerica Financial (Pramerica), a brand name used by Prudential Financial Inc of the United States, on Tuesday signed a binding term sheet for Pramerica to acquire DHFL’s stake in DHFL Pramerica MF. The transaction is subject to the signing of definitive documentation, customary closing conditions, regulatory and other approvals.”
The transaction will make the AMC a wholly-owned business of PGIM, the global asset management business of Prudential Financial Inc.
“Our expanded investment demonstrates our deep commitment to this market and confidence in both our talented leadership team and robust investment process. We strongly believe that when combined with the deep expertise and broad capabilities of PGIM, we are well positioned to serve our clients and to strengthen our competitive position in India,” said Glen Baptist, chief executive officer of PGIM Global Partners.
“This is a strategic call by DHFL to focus more on our core business. We firmly believe this move is in the best interest of all parties and will have a positive outcome for all stakeholders,” added Kapil Wadhawan, chairman and managing director of DHFL.
Pramerica and DHFL formed the joint venture in 2014 and immediately expanded its business through the acquisition of Deutsche Asset Management.
Housing finance, which is the core business of DHFL, is expected to see a slowdown in loan growth, given the industry is trying to recover from the liquidity crunch.