UBS to buy Stanchart MF business

Business Line

UBS Global Asset Management, a leading international asset management company, said on Friday that it has agreed to buy Standard Chartered Group's mutual fund business in India for about $120 million.
UBS said that the deal is structured for acquisition of 100 per cent stake in Standard Chartered Asset Management Company as well as Standard Chartered Trustee Company, the manager and trustee respectively, of the group's mutual funds in India.

The transaction, to be wrapped up by the second half of 2007, does not include Standard Chartered's mutual fund distribution business in India, said a statement from UBS.

The Standard Chartered group's assets under management amount to $3.1 billion. It currently manages 16 mutual funds, of which 10 are fixed income, two in asset allocation and four in equities. The equity funds represent around 19 per cent of the total assets under management.

Formerly known as ANZ Grindlays Asset management Company, StanChart AMC, set up in 1999, is the ninth largest fund manager in the country with four per cent share in the domestic market. Headquartered in Mumbai, the AMC has offices in 27 cities and employs 60 people.
UBS also announced its intention to form a strategic alliance with Standard Chartered Bank for fund distribution in Asia, the Middle East and Africa.

"The acquisition is a milestone in our plan to build a major presence in India's growing fund management industry and demonstrates UBS' commitment to this important market," Mr John Fraser, Chairman and CEO of UBS Global Asset Management, was quoted in a media release.
Mr Kai Nargolwala, Standard Chartered Group Executive Director, said: "Mutual fund management is not our core business and the time has come for us to evaluate whether we are adding enough value to the business for the customers. Our decision to sell the mutual fund business will enable us to play to our global strength in distribution of third-party financial service products. India remains one of our key markets."

While fixed income and money markets have been Standard Chartered's traditional focus representing 80 per cent of the invested assets, equities will form an increasing proportion of assets under management, said Mr Christof Kutscher, Head of UBS Asset Management in Asia Pacific.