Sundaram receives Sebi nod for purchase of Principal AMC in India

Sundaram Asset Management Company Ltd, the 100 per cent subsidiary of Sundaram Finance Ltd on Friday said it received the regulatory approval for the purchase of asset management businesses of Principal Asset Management Pvt Ltd.

Sundaram Asset Management Company would acquire the schemes managed by Principal India and acquire 100 per cent of the share capital of Principal Asset Management Pvt Ltd, a company statement said here.

"Leadership from both companies are pleased to report the receipt of final regulatory approvals for the purchase from the Competition Commission of India and from Securities and Exchange Board of India (SEBI)," it said.

The transaction is subject to compliance with SEBI prescribed processes and fulfilment of mutually agreed conditions precedent to deal closure. As per regulatory requirements, there would be an 'exit load free window' for investors to redeem their investments, where such exit load is applicable", it said.

"We look forward to complementing our existing Equities fund management talent with the addition of the team from Principal India. We endeavour to retain and absorb Principal India's distribution franchise with minimal disruption to their commercial terms," Sundaram Asset Management Company, managing director, Sunil Subramaniam said.

The existence of the same back-office service provider was expected to smoothen the transition for existing customers and distributors, he added.

Sundaram Finance Executive Vice Chairman Harsha Viji said, "this acquisition is a natural step in our aspiration to become a sizable player in the asset management industry. The combined business of both the entities will achieve an aspirational landmark of Rs 50,000 crore."

"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 said.
Post the deal closure, the schemes currently managed by Principal India and Sundaram would either be merged or renamed as Sundaram schemes in their respective categories. The investors and distributors of Principal India schemes would come under Sundaram and a wider range of schemes would be available to more than two million combined investor base, the release said.

"As Sundaram acquires our India asset management and retirement advisory businesses, our top priority is to ensure the best outcome and a smooth transition for our customers, distributors and employees," Principal International, chief operating officer, Pedro Borda said.

"We are confident that they will benefit from Sundaram's expanding mutual fund platform," he added.