State-owned Bank of Baroda will fully acquire its mutual fund and trustee business and buy the entire 51 per cent stake held by the joint-venture partner UniCredit. Bank of Baroda said it has executed a hare purchase agreement with UniCredit SpA (UniCredit), Baroda Pioneer Asset Management Company ltd (AMC) and Baroda Pioneer Trustee Company Pvt ltd (Trustee Company) on December 28, 2017.
“Pursuant the share purchase agreement, the Bank will be purchasing from its joint venture partner, UniCredit, their entire equity stake of 51 per cent in the AMC and the Trustee Company. Pursuant to the acquisition, the bank will become the sole shareholder of the AMC and the Trustee Company and the sole sponsor of the Baroda Pioneer Mutual Fund,” the bank said in a regulatory filing.
Thus, bank's shareholding increases to 100 per cent with the exit of foreign partner Pioneer Investments, Bank of Baroda said. The move comes on the back of the acquisition of Pioneer Investments (subsidiary of UniCredit) by Amundi earlier this year who already has a presence in Indian AMC.
“Given the rapid growth in the mutual fund industry and the trend of household savings moving towards financial assets, the bank sees merit in building out the asset management business, with an aim to become a meaningful player in the asset and wealth management space,” said PS Jayakumar, Managing Director and Chief Executive Officer, Bank of Baroda.