L&T Fin to buy Fidelity mutual fund biz

L&T Finance has not divulged the amount that it will be paying for the acquisition.

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L&T Finance,a part of diversified group Larsen & Toubro,today said it will acquire the mutual fund business of Fidelity in India for an undisclosed amount.

It has executed definitive agreements to acquire the companies — FIL Fund Management Pvt Ltd (Fidelity AMC) & FIL Trustee Company Pvt Ltd — carrying on the mutual fund business of Fidelity in India subject to regulatory approvals,L&T Finance said in a filing to the BSE.

Fidelity AMC,incorporated in 2004,manages the 15th largest mutual fund in India with a market share of 1.3 per cent and an average asset under management (AUM) for the quarter ended December 2011 of Rs 8,881 crore.

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Fidelity Mutual Fund is part of the US-based Fidelity Worldwide Investment,a global leader in asset management,providing investment products and services to individuals and institutions in the UK,continental Europe,the Middle East and Asia Pacific.

According to the filing,Fidelity AMC has built a robust equity oriented franchise which has access to large HNI (High Networth Individual) customers and a strong SIP (systematic investment plan) portfolio.

Its equity assets are the 10th largest in India with a market share of 3.1 per cent,it said.

“With this acquisition,we are one step closer to achieving our vision of being among the top players in the Indian mutual fund industry,” L&T Finance Holdings Ltd Chairman and Managing Director Y M Deosthalee said.

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This acquisition provides L&T Mutual Fund the necessary scale,products and access to retail customers to grow profitably,he said.

Lazard was the financial advisor to L&T Finance in the transaction.

L&T Financial Services established its presence in the Mutual Fund industry through the acquisition of the mutual fund business of DBS Chola in January 2010.

Since then,L&T Mutual Fund with debt-focussed portfolio has grown its total average AUM to Rs 4,616 crore for the quarter ended December 2011.

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“We see tremendous complementary strengths between both the mutual funds. The strong equity-focus of Fidelity’s Indian Mutual Fund,when combined with L&T Mutual Fund,results in a balanced asset base,” L&T Finance Holdings,President and Whole-time Director,N Sivaraman said.

The size of the combined entity (with an average AUM of Rs 13,497 crore for the quarter ended December 2011 and a market share of 2 per cent) together with the backing of the L&T brand would provide an optimal platform to improve margins and grow profitably,he said.