BNP Paribas Asset Management (BNP Paribas AM) and Sundaram Finance Ltd (SFL) have reached an agreement regarding a strategic partnership in asset management in India, whereby BNP PAM will buy a 49.9% stake in Sundaram Asset Management Company Limited (SAMCL), a wholly-owned subsidiary of Sundaram Finance Ltd. The joint venture thus created will be named Sundaram BNP Paribas Asset Management Company Limited.
Subject to relevant regulatory approvals, the transaction is expected to be completed in the first quarter of 2006.
With EUR 520 million in assets under management, Sundaram Asset Management Company Ltd provides a wide range of investment management products to a variety of corporate and retail customers. Significant synergies are expected on both sides and the joint venture aims at growing rapidly, thanks to SAMCL's expertise on the Indian market and to BNP Paribas AM's global investment management and distribution reach.
Commenting on the joint venture, S. Viji, Chairman of SFL, says, “the joint venture will combine the strength of the Sundaram Finance brand, the national retail reach and investment management skills of SAMCL with the international product expertise and global network of BNP Paribas AM. With this joint venture, we are well positioned to build on the already strong platform that has been established by SAMCL. We believe that this partnership will put the new venture on a faster growth path.”
Gilles Glicenstein, Chairman of BNP Paribas AM explains: “We believe that the Indian market is one of the most exciting and rapidly developing markets in the world; it has already shown substantial growth and has potential for much more. With this partnership we strengthen our already significant presence in new markets, where we currently manage Euro 15 billion. SAMCL has a well-established and high-quality platform in the management and distribution of asset management products in India. By combining this expertise together with our world-wide experience in product development and investment management, Sundaram BNP Paribas AM is well-positioned to become one of the key players in the fast-expanding Indian savings market."
About Sundaram Finance and Sundaram Asset Management Limited
Sundaram Finance, with over five decades in the financial services space, is one of the largest retail financial services players in India. In addition to vehicle financing, the SFL group offers a wide range of financial products to its retail customers including mutual funds, home loans, and general insurance products. It distributes a wide range of retail financial products through Sundaram Direct, a pan India network with an 800-strong sales forces. Sundaram Finance also has a presence in the BPO and IT segments through its divisions Sundaram Business Services and Sundaram Infotech Solutions respectively. Sundaram Finance ended FY 2005 with net profit of EUR 14 million. SFL has a nationwide network of over 160 branches and more than 2000 people. It has a strong presence in each of the business segments it operates in.
Sundaram Asset Management Limited is currently a 100% subsidiary of Sundaram Finance and manages assets of over EUR 520 million. SAMCL has a range of equity and debt products catering to various categories of investors. The recently launched SMILE and CAPEX equity funds attracted a large number of retail customers with subscriptions to the CAPEX fund exceeding EUR 118 million.
About BNP Paribas and BNP Paribas Asset Management
BNP Paribas is a European leader in banking and financial services, with a significant and growing presence in the United States and leading positions in Asia. BNP Paribas is the leading bank in the Euro zone in terms of net income in 2004. The group has one of the largest international banking networks, present in over 85 countries with close to 100,000 employees. BNP Paribas enjoys key positions in its three core businesses: Corporate and Investment Banking, Asset Management & Services and Retail Banking.
BNP Paribas India operations date back to 1860, and currently has a network of branches covering the 8 major cities. BNP Paribas India offers world class banking solutions through its two core business lines, Corporate & Investment Banking and Private Banking.
In addition to financing clients, both Corporates and Financial Institutions, BNP Paribas India is one of the top providers of Structured Risk Management solutions, Cash Management and Trade Finance; BNP Paribas offers Indian HNWI highly sophisticated Private Banking Services. In addition, it has a 26% interest in a life insurance joint-venture with SBI.
BNP Paribas AM is a fully-owned subsidiary of BNP Paribas, and is a major player in fund management and distribution with €226 billion in assets under management and advisory as of 30 June 2005. More than 1,400 staff work in the asset management business in 20 countries. BNP Paribas AM's management teams are present in the major world financial centres, including Paris, London, New York, Tokyo and Hong Kong. The teams are specialised in major asset classes, investment styles and geographic zones.
With EUR 15 billion in assets under management, BNP PAM New Markets is the specialized division of BNP Paribas AM in charge of developing asset management activities in emerging markets. It has successful ventures in Brazil, China, Korea, Turkey, Argentina, and Morocco.