Standard Chartered sold its asset management business to Infrastructure Development Finance Company (IDFC) for $205 million (Rs 825 crore). This values the fund house at 5.84 per cent of its average assets under management (AUM) in February and at 6.3 per cent of AUM as on January 31, 2008.The deal, which is likely to get completed by the second quarter of 2008, does not factor in the mutual fund distribution business. “We are delighted to have reached an agreement with IDFC for the sale of business,” said Jaspal Bindra, CEO (Asia), Standard Chartered. “However, Standard Chartered will continue to remain a distributor of asset management products in India.”“We are pleased to acquire a quality asset management platform,” said IDFC CEO and MD Rajiv Lall. “It is in line with our strategy of broadening our footprint in the asset management business and diversifying our fee-based revenue streams.”Details of the deal regarding the fund’s management are yet to be known. “This is a commercial transaction,” said A P Kurien, chairman, Association of Mutual Funds in India. “However, I am sure that the trustees involved would take into account the interests of investor as both are well recognised entities.”The fund house was earlier in talk with UBS for sale of its asset management business, though the deal could not materialise. UBS had then agreed to buy the fund house at a consideration of 5 per cent of its total AUM. By that account, the fund house has been able to mop up a higher valuation for itself even in a falling market.Earlier, in December 2007, Reliance Capital Asset Management sold a 5 per cent stake to Eton Park for Rs 501 crore. The deal valued the fund house at 13 per cent of the AUM, the highest so far.
