The Hindu Business Line : Joint agreement with SocGen unit signed

(From left) Mr C. Bhattacharya, MD & Group Executive, SBI; Mr A. K. Purwar, Chairman, SBI; Mr Philippe Collas, Chairman, SGAM; Fund; and Mr Alain Clot, CEO, SGAM, at the signing ceremony in Mumbai on Friday. - - Paul Noronha

Mumbai , Nov. 5

SBI Mutual Fund seeks to be the second biggest fund house in the country in the next four years, according to Mr A.K. Purwar, Chairman, State Bank of India. SBI Mutual Fund has formalised its joint venture with Societe Generale Asset Management (SGAM).

"With SGAM's expertise in product development, risk management and operational capabilities, we expect to regain the second position in the industry effortlessly," Mr Purwar said.

SBI has divested 37 per cent stake in the asset management company, for a valuation of $36 million. "SBI usually does not divest more stake than what is sold in the initial agreement," said Mr Purwar when asked about plans for further stake dilution in its mutual fund arm.

Inorganic growth for the AMC, through acquisitions of local mutual funds is not ruled out, he said.

SGAM is expected to bring in its expertise in product development, investment and technology support to its Indian partner. Company officials said that some SGAM officials would be located in India.

"We are pleased to be in this partnership and honoured to be selected by SBI. We have grown substantially around the world and now Asia and India are very important markets for us," said Mr Phillipe Collas, Chairman, SGAM.

SGAM also has a strong global research wing and strong products in the capital guaranteed and real estate categories, according to Mr Alain Clot, Chief Executive Officer, SGAM. The fund house also plans offshore funds that invest in India. "As and when the regulators permit investments in foreign funds, the partnership implies that we would have products to offer there as well," said Mr P.G.R. Prasad, Managing Director, SBI Mutual Fund.

Mr Purwar also said that non-core businesses of SBI, that have entered into joint ventures with foreign partners, like General Electric for credit cards and Cardif for life insurance, have done well post the introduction of the partner. Therefore, as a strategy, would be looking for joint venture partners in all non-core businesses.

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