Prajna Capital - An Investment Guide

JAPAN’S Nomura asset management company(AMC) has picked up a 35% strategic stake in LIC Mutual Fund for Rs 308 crore, valuing the seventh largest fund house at Rs 800 crore. This valuation amounts to less than 2.5% of the total assets under management of Rs 32,415 crore of LIC MF Asset Management Company ( AMC ) as on June 2009. The sale of 35% stake involves both fresh issue of equity and secondary sale. Following this agreement, LIC will hold 45%, and LIC Housing Finance 20%. Nomura will hold the balance 35% stake in the AMC. As a part of the deal, Nomura will bring in expertise in equity management — an area where LIC MF has lagged behind. “India is a very big market and there is a huge value in finding a local partner.By building on LIC’s outstanding brand image and customer network, we will be able to apply best practices to our combined business through our extensive experience as a global asset manager”, said Takumi Shibata,Deputy President and COO, Nomura Holdings. ...