US-based Prudential Financial Inc (PFI) announced on Tuesday an asset management joint venture with real estate giant DLF Ltd.
NEW DELHI: US-based Prudential Financial Inc (PFI) announced on Tuesday an asset management joint venture with real estate giant DLF Ltd, with which it already shares a life insurance partnership.
DLF Pramerica Asset Managers Pvt Ltd, which marks the entry of the world's 14th largest asset manager into India, will offer a wide choice of mutual funds and investment products to Indian consumers starting next fiscal.
DLF, the country's most valued realty firm, will be a minority partner in the venture with 39 per cent stake, but would lend its brand that is almost a household name in the country. PFI, which is unrelated to Prudential Plc of UK, will control the JV with 61 per cent stake.
Prudential International Investment Chairman and CEO Stephen Pelletier said that India, where very little household savings got invested in mutual funds, provided a great business opportunity.
According to Reserve Bank data, Rs 36,700 crore of household savings was invested in mutual funds in 2006-07, up from just Rs 1,500 crore in 2004-05.
In all, 1.6 per cent of the total wage earning population invests in mutual funds.
Pelletier expected the JV to be operational from the next financial year, by when regulatory approvals are expected. PFI also expects its life insurance JV with DLF - DLF Pramerica Life Insurance Company - to become operational in the first quarter of next fiscal.
He said the investment products would initially be sold through third party financial institutions such as banks but "over the medium-to-long term, we would like to have proprietor-based distribution network".
The JV would introduce global products in the Indian market, giving greater choice to consumers to diversify their investment portfolio.
Earlier, DLF Vice Chairman Rajiv Singh told reporters that the asset management JV, coupled with the life insurance partnership with Prudential, was a very formidable combination and will bring international standard of financial investment products to the Indian public.
"India is a very important market for Pramerica's growth... (Indian MF business) with USD 140 billion of assets under management is rapidly growing and Pramerica wants to be a part of it," Pelletier said.
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