Essel Finance Acquires Peerless Mutual Fund

Subhash Chandra's Essel Group announced its entry into the Indian mutual fund business by acquiring Peerless Mutual Fund. The Peerless General Finance and Investment Company (PGFI) has signed an agreement to sell its entire shareholding in MF business to Essel Finance Management. The acquisition will help Essel kick-off its innings in the industry with about Rs.970 crore, which was Peerless' assets under management as on September 30. The 43-member domestic MF industry manages assets worth Rs.16.1 lakh crore.
Both parties did not disclose the price of the transaction. At present, Peerless Mutual Fund manages one liquid scheme, four fixed income schemes, one hybrid scheme and three equity schemes including an Equity Linked Savings Scheme. Its three equity schemes manage Rs.169 crore.
Essel Finance is currently present in SME loans, housing finance, forex, private equity , investment banking & distribution businesses.
An increase in minimum net worth requirements to Rs.50 crore, high volatility in the market has put pressure on smaller asset management companies. Peerless is the seventh exit in recent times. Some other AMCs that sold their businesses in India in the recent past include JP Morgan, Goldman Sachs, Deutsche AMC, ING Investment and Morgan Stanley. JPMorgan sold off to Edelweiss, Goldman to Reliance, Deutsche to DLF Pramerica and ING Investment Management (India) to Birla Sun Life.

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