Mutual Funds

This week in MFs: Avendus Capital to acquire IDFC AMC

Global private equity KKR-backed Avendus Capital is said to be in the final stage of discussions to acquire IDFC Asset Management Company. The story was a Moneycontrol exclusive this week. The deal value is not known as yet, but generally, fund houses are valued at 6-7 percent of the total asset under management (AUM). IDFC Mutual Fund, the 12th largest in India by size, managed  Rs 69,574 crore assets as of June 30, 2018.

Kohlberg Kravis Roberts and Company (KKR), a global private equity (PE) firm is an investor in Avendus Capital, set up by Gaurav Deepak, Ranu Vohra and Kaushal Aggarwal in 1999 as an investment advisory firm. Avendus made its name with a series of successful technology deals.

One of the most aggressive private equity player-KKR managed $176 billion as on March 31. Avendus Capital has raised Rs 1,000 crore in the last two years. Although the last round of fundraising completed in November 2017 consisted some new investors, KKR continues to remain the largest investor and the majority shareholder.

Financial investors like KKR would view the mutual fund business as an attractive opportunity as it has been the direct beneficiary of formalisation of the economy and has attracted large inflows over the last couple of years. IDFC Asset Management Company was established in 2008 after IDFC bought Standard Chartered Asset Management Company for Rs 820 crore.

MF ranking

During the week, Association of Mutual Funds in India released a list of stocks based on market capitalisation for mutual funds. The regulator has ranked close to 5,077 stocks in all. AMFI has categorised the top 100 companies by full market capitalisation as large-cap stocks. Companies that rank 101-250 in terms of the full market cap have been categorised as mid-cap stocks, while the remaining are small-cap stocks.

Among other developments last week, Mahindra Mutual Fund roped in IDBI Mutual Fund’s V Balasubramaniam as Chief Equity Strategist. Prior to joining, Mahindra MF, Balasubramaniam was chief investment officer at IDBI Mutual Fund.

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