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IDBI-Principal to form AMC to boost mutual fund biz

Industrial Development Bank of India has entered into a Memorandum of Understanding with Principal Financial Group of the US in terms of which Principal will have 50 per cent shareholding in IDBI Investment Management Company Limited.

IIMCO is a 100 per cent subsidiary of IDBI.

The equity offloading by IDBI is subject to requisite approvals.

IIMCO is the asset management company that manages the various schemes of IDBI Mutual Fund. The MoU was signed by V P Singh, executive director, IDBI and Norman Sorensen, president, Principal International, representing PFG in Bombay today.

IDBI and Principal will enter into a shareholder's agreement within the next few months and develop a detailed business plan to set the understanding between them on management and operating procedures, introduction of new products, strategies for marketing, investment and management of funds.

The proposed joint venture is expected to capitalise on retail opportunities to develop, strengthen and expand the business of IIMCO through the introduction of new technology and products.

IIMCO will draw upon the global expertise of Principal for developing products and systems catering to small, medium and large enterprises as well as individual investors.

Principal has core competencies as a full service provider, including fund management and strong administrative capabilities, which would enable the joint venture to provide the Indian investors with a unique blend of Indian and international expertise.

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