Business & Investment

HSBC Asset Management: HSBC Asset Management Acquires Rupee 3,200 L & T Mutual Fund

New Delhi: HSBC Asset Management HSBC Holdings’ wholly owned subsidiary (India) said on Friday that it had signed an agreement to fully acquire L & T Finance Holdings Limited (LTFH) and L & T Investment Management Limited (LTIM) for $ 425 million or R3,193.

LTIM is a wholly owned subsidiary of LTFH and an investment manager of the L & T Mutual Fund. With assets of 80,300 chlores ($ 10.8 billion) and more than 2.4 million active folio as of September 2021, LTIM is currently ranked as the 12th largest investment trust company in India. For the fiscal year ended March 2021, pre-tax profit was Rs 18.5 billion ($ 25 million) and revenue was Rs 34.8 billion ($ 46.9 million).

The proposed acquisition strengthens HSBC’s asset management business in India. Currently a minor player in the industry, with assets close to 12,000 rupees. After completing the acquisition, which requires regulatory approval, HSBC will integrate LTIM’s business with the business of India’s existing asset management business.

“This transaction strengthens our business in India and strengthens our position as one of Asia’s leading wealth managers. Combining LTIM with our existing Indian asset management business over the next five years. We have the scale, scope and capacity to capture some of the expected 15-20% annual asset management market growth in India, “said Noel Quinn, Group CEO of HSBC.

“With the recent announcement to acquire AXA Singapore, this demonstrates our commitment to seize wealth opportunities in Asia. We will continue to invest heavily to achieve that goal.” He added.

The proposed acquisition will be funded from existing resources with minimal impact on HSBC’s Common Equity Tier 1 ratio. HSBC expects to increase the Group’s earnings as soon as the acquisition is completed and achieve a return on investment of over 10% in the medium term.

In February 2020, HSBC integrated retail banking with its wealth management, asset management, insurance and private banking businesses to establish Wealth and Personal Banking, which serves more than 39 million customers worldwide.

HSBC aims to become Asia’s leading wealth manager by 2025. Asia generates about half of HSBC’s $ 1.6 trillion global wealth balance and about 65% of the Group’s wealth revenue.

HSBC Asset Management: HSBC Asset Management Acquires Rupee 3,200 L & T Mutual Fund HSBC Asset Management: HSBC Asset Management Acquires Rupee 3,200 L & T Mutual Fund

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