L&T Finance acquires Fidelity's India mutual fund business

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L&T Finance (LTF), a subsidiary of L&T Finance Holdings (LTFH), has acquired FIL Fund Management (Fidelity AMC) and FIL Trustee company, engaged in mutual fund business in India. However, the deal is yet to get regulatory approvals, the non-banking finance company said in a notice sent to stock exchanges.

"This acquisition provides L&T Mutual Fund the necessary scale, products and access to retail customers to grow profitably," Y. M. Deosthalee, CMD of L&T Finance Holdings was quoted saying.

"With this acquisition we are one step closer to achieving our vision of being among the top players in the Indian mutual fund industry. We remain committed to that goal and look forward to building one of India's most admired asset management businesses."

Incorporated in 2004 Fidelity AMC manages an average asset under management (AUM) of Rs 8,881 crore for the quarter ended December 2011. Majority of its asset (around 68%) are equity oriented. It has a market share of 1.3%.

"Its equity assets are the 10th largest in India with a market share of 3.1%. Further, in the past 3 years, the fund performance has resulted in 4 of its 5 equity funds being ranked amongst top 10 in their respective category," said the notice.

L&T Financial Services established its presence in the mutual fund industry through the acquisition of the mutual fund business of DBS Chola in January 2010. Since then, L&T Mutual Fund has grown its total average AUM by a CAGR in excess of 33% to Rs 4,616 crore (average AUM for the quarter ended December 2011).