The financial crisis is fast pruning the number of new players that had lined up to enter the MF business in India. French bank Credit Agricole, which was in advance talks with Bank of India (BoI) for a joint venture, has called off plans to launch an asset management company (AMC).
A senior official close to the development told DNA Money, “The talks of Credit Agricole with the public sector bank have been called off following the merger of the asset management businesses of Credit Agricole and Societe Generale in January.”
The official reasoned that the Societe Generale Asset Management is already present in the India through a joint venture with State Bank of India. “It doesn’t make sense to duplicate when you have a healthy partnership going with a player with such a wide presence,” he added.
Thierry Mequillet, chief executive — Asia, Credit Agricole AMC Hong Kong, did not respond to an e-mail questionnaire sent by DNA. BoI now has one less partner to negotiate with. But the bank is in no hurry since the prevailing bear market is not seen as favourable for launching AMCs.
“We are not in a hurry. You know the market conditions. We had shortlisted some players. But we are not making further moves at this stage,” T S Narayanasami, chairman and managing director said.
He added that the launch of the AMC may have to wait till the next year. Societe Generale Asset Management has a 37% stake in SBI MF, with State Bank of India owning the rest. SBI MF officials said Credit Agricole is committed to carrying on with the SBI joint venture. Achal Kumar Gupta, MD and CEO, SBI MF said, “We are together. There has been no change in our functioning post the merger.”
Credit Agricole, the parent of securities firm CLSA, is the third foreign player to pull out of India, after Goldman Sachs and Aegon. Aegon also got ditched in the nth hour due to a crisis merger. Its partner Religare decided to go it alone after acquisition of Lotus Mutual Fund in October.
Other ventures like Shinsei, DLF Pramerica and the proposed ventures of ASK, Motilal Oswal and India Infoline are taking their own sweet time to start business.
