Nomura exits the fund business in India

May 18, 2016

LIC Nomura Mutual Fund is now LIC Mutual Fund.

This has come as no surprise. Last year, news reports stated that Japanese fund house Nomura planned to exit the mutual fund space. Which translated into terminating its joint venture with the state-run insurance giant. Or, at the very least, reduce its stake.

It was then reported that LIC Housing Finance Ltd, in a stock-exchange filing, stated that it would buy a 19.3% stake each in LIC Nomura Asset Management Company and LIC Nomura Mutual Fund Trustee Company, from the Japanese company, for Rs 27.36 crore and Rs 1.52 lakh, respectively. At that time, Nomura owned a 35% stake in each of the companies.

However, Nomura has completely exited the joint venture. The new joint venture partners are GIC Housing Finance and Corporation Bank along with the existing partner LIC Housing Finance Ltd.

The shareholding pattern of the AMC is: LIC at 45%, LIC Housing Finance Ltd at 39.30%, GIC Housing Finance at 11.70%, and Corporation Bank at 4%.

All approvals from SEBI and other regulatory bodies concerned have been received.

The mutual fund industry has seen many exits by global players - JP Morgan, Goldman Sachs, Deutsche Bank, Morgan Stanley, ING Investment Management, PineBridge Investments, Daiwa, Fidelity and Belgium-based KBC Asset Management. The latest being Nomura.

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Aravind Sankeerth
May 19 2016 08:39 AM
I some how get a feeling that, the foreign guys cant achieve scale like the locals so. The good thing for some one to do when they are unable to scale up, is to exit and thats what the Foreign houses are doing. Indian's on the other hand have high respect for a foreign name, thats what MF's are missing. A partner like Invesco, Fidelity, JP Morgan or ING can be hugely profitable for the minor partner. Any way, this is just my though process and the big heads know better whats good for them. No one wants to stay through a bubble and seem to be getting out when valuations and greed is high rather than wait for despair like Tata Steel and sell for peanuts. I feel the MF, Housing Finance and Insurance businesses are getting over heated. They are not still that developed for a country like India.
May 18 2016 12:54 PM
And what is the reason for such exits? Do you have any analysis on the possible reasons for such exits by renowned International fund houses from the Indian MF space?
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