Exclusive | Avendus in last lap to acquire IDFC AMC

Financial services firm Avendus Capital is in the final stage of discussions to acquire IDFC Asset Management Company, sources familiar with the negotiations told Moneycontrol.

The deal value is not yet known but generally, fund houses are valued at 6-7 percent of the total asset under management (AUM).

Kohlberg Kravis Roberts and Co (KKR), a global private equity (PE) firm is an investor in Avendus Capital. Avendus Capital has raised Rs 1,000 crore in the last two years. Though the last round of fund raising completed in November 2017 consisted of a couple of new investors, KKR continues to remain the largest investor and the majority shareholder.

Financial investors like KKR are bullish on India's fast-growing asset management business which has been a major beneficiary of the recent shift in household savings from physical assets to financial instruments.

IDFC Mutual Fund, the 12th largest mutual fund in India by size, managed  Rs 69,574 crore as on June 30, 2018.

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An e-mail response from Avendus stated,"We do not comment on market speculation.”

However, IDFC AMC did not respond to Moneycontrol’s e-mail.

Over the last couple of decades, Avendus has transformed itself from a pure investment bank into a financial services firm spanning wealth management, credit solutions, and alternative asset management. The mutual fund business, if added, will add to its bouquet of offerings

Among the companies that bid for IDFC AMC were BlackRock Inc, Reliance Mutual Fund, Mirae Asset Global Investments (India) IndusInd Bank and BlackRock Inc.

According to sources, the promoter of IDFC AMC was not keen to sell to AMC to an existing mutual fund player.

In March 2017, IDFC Financial Holding Company, a subsidiary of IDFC Ltd, had agreed to buy back a 25 percent stake in IDFC AMC from Paris-based Natixis Global Asset Management for Rs 244.24 crore.