BlackRock of the US, the world’s second largest asset manager with $ 6.32 trillion in assets, is exiting from its joint venture asset management company (AMC) in India. Financial services firm DSP group, controlled by Hemendra Kothari, has proposed to buy out BlackRock’s 40 per cent stake in DSP BlackRock Investment Managers which manages over Rs 1,10,000 crore of investors’ money across equity, fixed income and alternatives with over 2 million individual investors.
DSP BlackRock is a 60:40 joint venture (JV) between DSP group and BlackRock and is one of the leading asset management companies (AMCs) in the country. After the buyout, the the firm is proposed to be known as DSP Investment Managers Pvt Ltd and DSP BlackRock Mutual Fund will become DSP Mutual Fund, subject to regulatory approvals. However, both the parties did not disclose the cost of the transaction.
The US firm — called as the world’s largest shadow bank due to its financial muscle — indicated that it would be interested in continuing in India. “BlackRock remains deeply committed to India, and we look forward to having a continued positive impact on the asset management industry in the country,” said Laurence D Fink, chairman and CEO of BlackRock.
The DSP group’s joint venture arrangement with Merrill Lynch Investment Managers in 1996 established its retail asset management business in India — DSP Merrill Lynch Asset Management (India) Ltd. This business went on to become DSP BlackRock Investment Managers Pvt Ltd in 2008 after BlackRock Inc took over Merrill Lynch’s global asset management business in 2006.
“DSP BlackRock has a robust investment process in place across all its investment teams managing active as well as passive investments across both equities and fixed income. DSP BlackRock manages/ advices assets in excess of Rs 1,10,000 crore ($16.5 billion) across equity, fixed income and alternatives as on April 30, 2018 with over 2 million individual investors,” it said.
BlackRock has longstanding investment capabilities covering India, both in country and elsewhere on BlackRock’s platform. The firm manages a diverse book of Indian equity and fixed income investments in active and passive indexed or ETF (exchange traded fund) strategies. Excluding the joint venture in DSP BlackRock, the firm currently employs over 1,400 professionals in India across offices in Gurgaon, Mumbai and Bangalore, and has grown its headcount 50 per cent over the past three years.
“We at the DSP group are very excited about our days ahead and we believe we have just scratched the surface of the opportunity that lies before us. The next decade will see the asset management industry in India grow manifold and the DSP group is very well poised to capture a significant portion of that growth,” said Hemendra Kothari, chairman, DSP BlackRock Investment Managers Pvt Ltd.
DSP Mutual Fund manages assets worth Rs 86,000 crore in equity and debt. “We will continue investing in our people, our technology platforms and our relationships with clients and distribution partners, to maintain our steadfast focus on delivering long term investment excellence. Pursuing the investor’s best interests is always at the forefront of all that we do and our unwavering integrity and commitment to excellence has helped us earn our clients’ trust. This will remain the core of our mission, as we enter this next phase as DSP Mutual Fund,” Kothari said.
The DSP group is one of the oldest financial services firms in India, having commenced its stock broking business in the 1860s. The earlier generation of the family was among the founding members of the Bombay Stock Exchange in the 1870s. Over the past 152 years, the family behind the group has been influential in the growth of capital markets and money management business in India.