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Principal Mutual Fund: Sundaram AMC to take over Principal Mutual Fund in India

In a big development, Sundaram Asset Management Company Limited has announced the purchase of the asset management businesses of Principal Asset Management Pvt. Ltd. Sundaram will acquire the schemes managed by Principal Asset Management and acquire 100% of the share capital of Principal AMC, Principal Trustee Company Pvt. Limited and Principal Retirement Advisors Pvt. Ltd.

The fund houses have said that they will ensure that there will be no disruption of service to their partners and investors in the interim and a seamless transfer once approval is obtained.

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 Mutual has over Rs 40,000 crores in assets under management, the majority of which is in equity oriented schemes. Principal Asset Management on the other has assets under management of Rs 7,447 crore as on December 31, 2020 with about 90% of this in equity-oriented schemes.

“This transaction will strengthen our presence in the marketplace with the addition of a range of schemes with a good long term performance track record across the large and mid-cap segments. This will complement our business which has traditionally been weighted towards the mid- and small-cap segment,” said Sunil Subramaniam, Managing Director, Sundaram AMC.

“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 priority. We believe they will benefit from Sundaram Asset Management’s larger mutual fund platform in this market,” Pedro Borda, chief operating officer, Principal International.

Principal AMC said that it is committed to the continued operation of Principal Global Services in Pune and Hyderabad to provide critical technical support and services to its offices around the globe. JM Financial Limited acted as the exclusive financial advisor and J. Sagar Associates acted as the legaladvisors to Sundaram Asset Management Company. Barclays acted as the exclusive financial advisor and Cyril Amarchand Mangaldas as the legal advisors to Principal.

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