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Built on Acquisition

The acquisition of Fidelity gives L&T Mutual Fund a well-established range of equity fund offerings…

L&T mutual fund was built on acquisitions, with Fidelity being the latest AMC bought by L&T in March 2012. The Fidelity acquisition gives this fund house a very well-defined equity portfolio, which compliments its existing range of debt funds. In 2009, the erstwhile DBS Chola Mutual Fund was bought by L&T to kick-start its asset management business. DBS Chola came into existence in 2006 as a joint venture between the DBS Bank of Singapore and the Murugappa group. The Murugappa Group had launched its asset management business in 1997 as a joint venture with UK-based Cazenove Fund Management and Cholamandalam Investment & Finance, part of Murugappa Group. The Murugappa Group acquired Cazenove’s stake in 2001 to be on its own.
However, the AMC faces its stiffest challenge in managing the transition and change in management. The announcement of Fidelity’s imminent sale was a cause of worry among investors who also went on a redemption drive, impacting the fund’s performance. How L&T manages the new alignment will decide the its future.