Sundaram Finance Limited (SFL) has entered into an agreement with BNP Paribas Asset Management (BNP PAM), whereby the latter will buy a 49.90 per cent stake in Sundaram Asset Management Company Limited, which is a wholly-owned subsidiary of SFL. The consideration for the acquisition will be Rs 100.38 crore. Subject to the regulatory approvals, the transaction is expected to take effect in the first quarter next year. The joint venture will be named Sundaram BNP Paribas Asset Management Company Limited.
Sundaram AMC was set up in August 1996 as a 61:39 joint venture between Sundaram Finance and Stewart Newton Holdings (Mauritius), a subsidiary of the UK-based Newton Investment Management. In 2001, Newton was taken over by the US-based Mellon Financial Corporation. Following this, there were some doubts on whether the objectives of the new partner would be in line with those of Sundaram's. Hence, in February 2002, Sundaram Finance bought Newton's entire stake.
Looking at Sundaram's funds one gets the feeling that the AMC deserves to manage much more money than it presently does. Its older equity funds have a decent performance record. The credit should go to a very disciplined approach of the management with a focus on risk management. Anyone's search for stable, low-risk funds can easily end here.
BNP Paribas figures among the leading banking and financial services players of Europe, with presence in businesses like corporate and investment banking, asset management and services and retail banking.
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