Shinsei Bank sells off mutual fund operations to Daiwa Securities, exits India

Shinsei Bank, a leading Japanese financial institution, is exiting its mutual fund operations in India by selling its entire stake in Shinsei Asset Management Company (AMC) to Daiwa Securities Group.

Shinsei Bank which owns 75% stake in Shinsei AMC, on Monday formally announced that it has reached an agreement to sell its entire stake to Daiwa Securities Group. Inc and Daiwa Asset Management Co Ltd (jointly “Daiwa Securities Group”). The domestic shareholders of the AMC, namely Rakesh Jhunjhunwala (15% stake) and Freedom Financial Services (10%), will also be divesting their stake.

Talk of a stake sale was first reported by DNA Money in its issue dated September 19 2009.

Valuation for the deal was not disclosed, though Shinsei’s was not a distress sale. Commenting on the reason for sale, Rahul Gupta, senior managing executive officer, CFO and board member of Shinsei Bank, said, “It’s not because we don’t like India, but the stake sale is on account of recalibrated strategy to focus on Japan”.  

Shinsei maintains that there would not be significant change in its team in India post this sale, which would take 4-6 months for completion.

“In light of the divestiture, Sanjay Sachdev, general manager and country manager - India, has decided to resign to pursue other entrepreneurial opportunities. Over the next few months, Sachdev will still assist with the closure of the sale to Daiwa Securities Group,” said Gupta.