A month after getting the Securities and Exchange Board of India's nod to launch an asset management company, Dutch financial services major Aegon and Religare Enterprises have decided to part ways.
A joint statement said that Aegon will assume control of Religare Aegon Mutual Fund, a 50:50 joint venture. Lotus India Mutual Fund, which was acquired by Religare Aegon two weeks ago, will be Religare's asset management business in India.
Though the two partners have decided to end their relationship in the mutual fund venture, there will be no change in the shareholding of Aegon Religare Life Insurance at the moment. While Religare Enterprises holds a 44 per cent stake, Bennett, Coleman has 30 per cent and Aegon the balance 26 per cent.
Sources familiar with the development said that the two partners decided to part ways on the grounds that the recent acquisition of UK-based brokerage firm Hichens Harrison by Religare Capital Markets may result in a conflict with Aegon's existing businesses in Europe.
According to sources, the recent Religare Aegon move to acquire the ailing asset management business of Lotus India Mutual Fund may have also contributed to the split. The deal was pushed by the Indian partner, and Aegon was kept out of the picture, they added.
The sources said Aegon felt that the acquisition of Lotus will hamper its plan to launch an offshore fund in India as Fullerton, the promoters of Lotus India Asset Management Company, already runs a Rs 85-crore offshore fund called Fullerton Sabre Lotus India fund.
Religare is promoted by Malvinder Singh and Shivinder Singh, the promoters of Ranbaxy who sold their stake in the pharmaceutical company to Daiichi Sankyo.
In 2006, Religare and Aegon formed a joint venture for asset management business in India. Around a month ago, the Securities & Exchange Board of India gave a licence to the asset management company. Religare Aegon currently awaits Sebi's nod for three funds, which includes an equity fund, a liquid fund and a debt fund.
Through the Lotus acquisition, which is awaiting regulatory approval, Religare Aegon would have got access to six equity funds and a host of debt funds with combined assets under management of Rs 5,458 crore.
The fresh proposal is subject to regulatory approval.
The 100-odd Religare Aegon Mutual Fund employees are expected to be given the option to join either Aegon or continue with Religare for the funds acquired from Lotus. The top management, however, may not join Aegon.