Investors in the Bank of Baroda mutual fund have something to cheer. Italy’s Pioneer Investments has picked up a 51% stake in their asset management business.
MUMBAI: Investors in the Bank of Baroda (BoB) mutual fund have something to cheer. Italy’s Pioneer Investments has picked up a 51% stake in the bank’s asset management business. The new entity will be known as Baroda Pioneer AMC.
The fund house, which is at the bottom of assets tables with a Rs 101-crore corpus, stands to benefit immensely by roping in a committed AMC partner that has 80 years of experience in fund management. Hitherto, BoB funds were managed largely by officers on deputation from the parent bank.
Anil Khandelwal, chairman & managing director, BoB, was upbeat. “I am delighted that in Pioneer Investments we have found a partner that matches our history and reputation.”
Experts say this will be a win-win for both the partners. While the bank gets access to fund management expertise, the foreign partner gets access to BoB’s vast distribution network of 1,100 branches and customer base of 29 million.
“Pioneer is a mid-sized fund management company abroad and its entry could be a big change for Bank of Baroda Mutual Fund. Investors should wait and watch,” said Dhirendra Kumar, CEO, Valueresearch, an independent firm dealing with mutual fund research.
Pioneer is not new to the joint venture space, nor is it new to India. “Pioneer might have had many partners, but they have maintained themselves well … they are finding newer and better partners,” said Khandelwal.
Pioneer, under US management then, was the first private sector mutual fund to set up shop in India in 1993. Then it had partnered with Investment Trust of India owned by HC Kothari Group to float Kothari Pioneer Mutual.
In 2000, cracks begin to appear with the Investment Trust of India (Kothari group) exiting from its ownership stakes in the fund by selling it to the Maloo group. Soon Pioneer group, US, itself changed hands.
UniCredito Italiano of Italy bought the Pioneer group. The Italian group also became the owner of all the global investment management business of Pioneer.
On completion of the transaction, Pioneer and EuroPlus Research and Management, UniCredito’s own asset management division, merged to form Pioneer Investments with $100 billions of assets under management.
Troubled times followed as the market went into a slump following the tech crash and the 9/11 events.
In 2002, Pioneer and its local partner (Maloo group) sold the AMC to Franklin Templeton, creating the then 2nd-largest mutual fund (after UTI).
Three Kothari Pioneer funds, namely India Prima, Infotech and India Bluechip, were passed on to Franklin Templeton Mutual Fund.
Clearing doubts raised over the history of its short-lived alliances in the past, Dario Frigerio, global CEO, Pioneer Investments, said, “We have faith in this marriage and are bringing in lot of commitment. We don’t have divorce on mind.”
However, neither party declined to comment on the dowry.
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