ChrysCapital, GIC back $593m India asset management carve-out
ChrysCapital Partners and GIC have teamed up with Bandhan Financial Holdings – an Indian banking and financial services company – to acquire IDFC’s asset management business for INR 45bn (USD 593m).
Established in 2000, IDFC Asset Management is India’s ninth-largest asset manager with more than INR 1.15trn under management as of March. It held mutual fund portfolios for over 1m clients, including institutions, corporates, family offices, and high net worth individuals, across 750 cities and towns nationwide. The company maintains branches in more than 50 cities.
IDFC is making the divestment as part of efforts to unlock value. The company is also working towards a three-way merger with two separately listed affiliates, IDFC Financial Holding and IDFC First Bank. Offloading the Asset Management arm was reportedly seen as essential to securing the Reserve Bank of India's approval for the merger.
Bandhan Financial Holdings is controlled by Bandhan Financial Services, a non-banking finance company (NBFC). It serves as promoter of Bandhan Bank with a 40% stake. The group has identified wealth management as a key vertical in its future growth and the IDFC business plugs into a vacant space in its service offering.
“The company is well poised for the future with strong industry tailwinds including increasing financialisation of savings and a growing equity culture amongst the younger generation,” Ashish Agarwal, a managing director at ChrysCapital, said in a statement.
ChrysCapital has made a string of successful investments in the financial services space. At present, its sector coverage is limited to HeroFinCorp, an NBFC, the National Stock Exchange of India, and Varthana, which provides financing solutions to private schools.
Recent PE activity in the sector has focused on wealth management. The Blackstone Group purchased a majority stake in Ask Investment Managers for a reported USD 1bn in February and then Bain Capital paid INR 33.8bn for a 24.98% stake in IIFL Wealth Management earlier this month.
Citigroup acted as the exclusive financial advisor and Cyril Amarchand Mangaldas as the legal advisor to IDFC on the IDFC Asset Management divestment. The buying consortium was advised by JM Financial, Khaitan & Co, and Trilegal.
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