Sundaram MF has acquired Principal Mutual Fund, after the later decided to exit the asset management business in India as a part of the review of portfolio of businesses and global market dynamics. Sundaram will acquire all the schemes managed by Principal MF and also 100% of the share capital of Principal AMC and Principal Retirement Advisors.
As per a filing with the BSE, Sundaram Finance will pay a consideration of ₹338.53 crore, amounting to 4.5% of its assets under management to Principal AMC.
As per data from Accord Fintech, Sundaram MF manages assets of ₹31,761 crore and ranks 17th in the mutual fund space, while Principal MF has assets of ₹7,448 crore and is ranked 24th in the 43-player industry. Both the asset management companies are strong in the equity space with Sundaram managing equity assets of ₹21,150 crore and Principal ₹6,384 crore. Principal MF is part of Principal Financial Group, head-quartered in Des Moines, Iowa, US. Principal Mutual Fund started operations in India in 2000 and currently serves over 5.5 lakh customers.
Low profitability, thin margins and challenges in the domestic markets have led to several foreign players exiting the domestic MF business like JPMorgan MF, Fidelity MF, Morgan Stanley MF among others.