Reuters: Private Equity: UPDATE 1-L&T Finance buys Fidelity's India fund business

Reuters: Private Equity Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

UPDATE 1-L&T Finance buys Fidelity's India fund business Mar 27th 2012, 12:15 Tue Mar 27, 2012 8:15am EDT * Financial details of the deal not disclosed * Fidelity India unit managed 88 bln rupees assets at end-Dec (Adds details) MUMBAI, March 27 (Reuters) - India's L&T Finance Holdings has acquired Fidelity Worldwide Investment's India mutual fund business to boost growth in the country's growing but highly competitive asset management business. Financial details of the deal were not disclosed. The acquisition will provide L&T Finance, a unit of Indian engineering conglomerate Larsen & Toubro Ltd, more products and access to retail customers, the company said in a statement on Tuesday. Shares in L&T Finance, which the market values at $1.6 billion, ended 4.2 percent higher at 50 rupees before the deal announcement, while the broader Mumbai market rose 1.2 percent. Fidelity Worldwide was looking to sell its India mutual fund business, a source with direct knowledge said on Jan. 30, as growing competition, weaker markets and regulatory changes take a toll on the sector's profitability. The sharp fall in the Indian equity markets last year and the recent regulatory changes such as the removal of the entry load, or a commission charged by a mutual fund distributor for selling a product, have added to the competitive pressure. Fidelity Worldwide's India asset management arm, which was launched in 2004, managed assets worth about 88 billion rupees ($1.7 billion) as of end-December, data from the Association of Mutual Funds in India showed. As per the assets under management, it was the 15th largest company in India's 44-player asset management industry. Assets managed by fund managers in India rose to 5.9 trillion rupees ($118 billion) as of March 2011 from 2.3 trillion in March 2006, a study by research and consultancy company PricewaterhouseCoopers showed. Lured by the long-term prospects of Asia's third-largest economy, overseas fund managers, such as U.S.-based T. Rowe Price Group Inc and Fidelity, have been buying into Indian money managers or setting up operations on their own. Nippon Life Insurance earlier last year paid $290 million for a 26 percent stake in the asset management unit of Indian financial services provider Reliance Capital Ltd. Lazard was the financial advisor to L&T Finance for the acquisition. ($1=50.7 rupees) (Reporting by Sumeet Chatterjee and Aditi Shah; editing by Malini Menon) Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions