Mahindra Finance has set a close watch like eagle eye on the growing demands and market in financial products like mutual funds and retirement plans, the Mahindra group has now confirmed and reassured its investors that its new goal is in its asset management business with a new strategic tie-up with Canadian Firm.
The financial services arm of the Mahindra group, Mahindra & Mahindra Financial Services, through its subsidiary Mahindra Asset Management, has entered into a joint venture with Manulife, a Toronto-based Canadian Company providing wealth and asset management, and life insurance services.
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The 132-year old Canadian firm has achieved and managed assets worth $849 billion as of March 2019 and it operates on a global scale in Asia, Canada and the United States (branded John Hancock). Anil Wadhwani, chief executive and president of Manulife Asia, said that the group has been operating in several developing Asian countries for decades. “Manulife is a leader in Hong Kong and second largest player in Indonesia,” said Michael Dommermuth, head of wealth and asset management-Asia, Manulife Investment Management.
Manulife, through its Singapore-based subsidiary, will bring $35 million in working capital for a 49% stake in the joint venture, while the Mahindra group firm will hold the rest. As per regulator SEBI’s rule, since both the partners hold over 40% each, they will together be the sponsors of the all the schemes under the joint venture.
It is reported that it has commenced its operations in July 2016, Mahindra AMC is still in a development phase of the business, with assets under management (AUM) of just over ₹5000 crore as on January 2019. It fund manages ₹1800 crore of retail money while the rest comes from institutional investors. With Manulife’e expertise, Mahindra wants to diversify and expand its strong foothold substantially across the world. Says Ramesh Iyer, vice-chairman and managing director at Mahindra Finance, “Our focus is going to be the middle India which turned traditionally to physical assets, cash and gold as their primary savings instruments.”
Iyer says that as returns from physical assets continue to show a falling trend, investors will shift their savings to financial assets. Manulife’s Dommermuth is also optimistic about the need for retirement funds in India. “There is a big scope of organic growth in the business,” he says.
The joint venture will bring forward together couple of synergies one is Mahindra’s domestic market strength and track record of successfully building businesses focused on meeting customer needs, and second is with Manulife’s global wealth and asset management capabilities and richness of experience in servicing the needs of Asian consumers, across developed and developing markets.
Manulife is a leading international financial services group across the World.