Mumbai/Seoul: Top fund house Reliance Capital Asset Management Company on Friday roped in the largest Korean asset management firm Samsung AMC for a strategic alliance, which will allow the two companies to manage, market and distribute each other's investment products in India and South Korea.
Samsung AMC, which manages assets worth over USD 165.8 billion and part of Samsung Group, is also looking to explore opportunities in the ETF market in India through this partnership.
RCAM, which runs Reliance Mutual Fund, is part of Anil Ambani-led conglomerate Reliance Group's financial services arm Reliance Capital, which already has strategic tie-ups with financial services giants, including Nippon Life from Japan for its insurance and mutual fund businesses, among others.
As part of the new MoU, signed today in Seoul by RCAM CEO Sundeep Sikka and Samsung AMC chief Sung Hoon Koo, both the companies "will use their expertise to explore areas for developing, managing, marketing and distributing each other's investment products in India and Korea," they said in a joint statement.
The two firms will also seek to develop and explore business opportunities in active and passive strategies, leveraging upon their specific investment and distribution reach, in India and Korea.
RCAM said the alliance between two leading asset management companies will provide both Korean and Indian investors, seeking exposure in global equities, with enhanced investment opportunities and significant diversification benefits.
Samsung AMC said India is one of the biggest economies in the world with strong growth potential in the mutual fund market and the two companies will seek to explore business opportunities in ETF business, among others.
It further said that India's international mutual fund market is in the early stage and has strong growth potential in the future.
Total AUM for international mutual funds are around USD 811 million while total AUM for mutual fund market is around USD 195 billion, it added.
The MOU is part of Samsung Asset Management's global business strategy to expand and strengthen its presence in the global market.
Samsung Asset Management has its overseas subsidiaries in Hong Kong and the US and plans to acquire Samsung Life's London subsidiary within this year.
On the other hand, RCAM is looking to further expand its product portfolio and offer world class products to Indian and global investors through this MoU.
In recent years, RCAM has been expanding its offshore capabilities and has managed and advised assets of over USD 1.5 billion.
Indian asset management market has grown by around 12 percent per annum since 2008 to USD 190 billion and offers tremendous potential to overseas investors.
"Samsung's leadership experience in Korea, with over 51 percent market share in ETFs, and our complementary expertise in investment strategies will help us expand the market for Indian funds globally," Sikka said.
Samsung AMC is the leader across all major investment categories in Korea, including ETF, Fixed Income and Equities.
The company has over 51 percent market share in ETF across 16 ETF managers in Korea.
RCAM is India's leading AMC in India in terms of AUM and profitability.
The company managed over Rs 2,44,000 crore (USD 40 billion) as of March 31, 2015 across mutual funds, government sponsored public funds, managed accounts, AIF and offshore funds.
