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BlackRock to enter India's asset management sector with Jio Financial JV

Move marks re-entry of world's largest asset manager in domestic market

BlackRock Inc

BlackRock (Photo: Bloomberg)

Abhishek Kumar Mumbai

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BlackRock, the world’s largest asset manager, has joined forces with Mukesh Ambani-led Jio Financial Services (JFS) for a foray into India’s asset management space.

The move will mark the US-based investment manager’s re-entry into the domestic market. It will also provide the recently hived off arm of Reliance Industries a solid foundation for its financial services ambitions.

“JFS and BlackRock today [Wednesday] announced an agreement to form Jio BlackRock, a 50:50 joint venture that combines the respective strengths and trusted brands of BlackRock and JFS to deliver tech-enabled access to affordable, innovative investment solutions for millions of investors in India,” the two firms said in a joint press release. The JV will launch operations after the necessary regulatory and statutory approvals.

This will be BlackRock’s second shot at the fast-growing domestic asset management space. It had exited DSP BlackRock Investment Managers in 2018 by selling its 40 per cent stake to DSP Group.

A week ago, JFS got a valuation of Rs. 1.66 trillion after a special trading session on the stock exchanges where its shares were priced at Rs. 261.85 apiece — higher than analysts’ expectations of Rs. 134-224 per share.

The asset management space includes businesses like mutual fund, portfolio management services, and alternative investment funds (AIFs). The JV has not disclosed as to which business it will start with.

After the Covid-19 pandemic, the Rs. 45 trillion Indian mutual fund industry has seen the entry of a lot of new players. At least seven players have entered the space by either getting a fresh licence or through acquisition. Bajaj Finserv is the latest entrant. Six others, including Zerodha, are awaiting approvals from the Securities and Exchange Board of India to start operations.

Commenting on the partnership with BlackRock, Hitesh Sethia, president and CEO, JFS, said: “This is an exciting partnership between JFS and BlackRock, one of the largest and most respected asset management companies globally. The partnership will leverage BlackRock’s deep expertise in investment and risk management along with the technology capability and deep market expertise of JFS to drive digital delivery of products.”

Rachel Lord, chair & head of APAC, BlackRock, said, “India represents an enormously important opportunity. The convergence of rising affluence, favourable demographics, and digital transformation across industries is reshaping the market in incredible ways.”

Two's a team

  • BlackRock is the world’s largest asset manager with nearly $8 trillion in assets
  • Jio Financial, recently hived off from RIL, emerged as the country’s third-biggest NBFC, valued at Rs. 1.66 trillion ($20 billion)
  • BlackRock has deep expertise and talent in investment management, superior technology and scale
  • Jio Financial has local market knowledge, pan-India digital capabilities

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First Published: Jul 26 2023 | 10:32 PM IST

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