Religare to sell 49% in AMC arm to Invesco

Religare Enterprises is selling 49% stake in its wholly owned mutual fund business to New York Stock Exchange-listed Invesco.

It joins a host of fund houses that have recently offloaded stakes or have tied up with stronger fund houses to battle slack in the sector.

While both companies declined to comment on the valuation, sources said it could be in the range of 6-7% of the fund’s  assets under management (AUM).

Religare managed average assets of Rs10,958.32 crore in the three months ended June, which values the transaction at Rs650-800 crore.

Religare AMC had a profit of Rs31 lakh in the last fiscal, according to its officials.

“This addition will enhance Invesco’s presence in an important and growing market, while providing Religare’s clients access to our broad range of investment solutions,” said Martin L Flanagan, president and CEO of Invesco.
Invesco had $669 billion (`35 lakh crore) of AUM at the end of August, according to its website. Its India operations include a 600 person support centre in Hyderabad, which helps with information technology, investment operations, finance, compliance and human resources.

It is also present in the private equity space through its affiliate WL Ross & Co.

Religare officials said the partnership would help the firm increase its offshore reach and revenues.
Religare had first teamed up with Aegon for the asset management business, which was dissolved after it acquired Lotus mutual fund in 2008. The mutual fund business was then renamed as Religare AMC.

It would now be called Religare Invesco AMC, subject to regulatory approvals.

There would be no changes in the management team though Invesco would have representation on the board.

In a separate development, Religare Enterprise Ltd’s promoter RHC Finance Pvt Ltd pledged 2 million shares, or 1.34% stake, of the company to Axis Trustee Service Ltd. RHC holds 16.44% stake in Religare Enterprises.