Hemandra Kothari’s DSP Group will buy the 40% stake held by global investment manager BlackRock in DSP BlackRock Mutual Fund. Once the buyout is complete, the fund will be known as DSP Mutual Fund and the AMC will be renamed DSP Investment Managers.
The announcement follows many days of speculation about the impending ‘divorce’ between the partners. The joint venture also recently saw the departure of its equity Chief Investment Officer (CIO) Anup Maheshwari.
DSP Blackrock Mutual Fund has an AUM of around Rs 1.10 lakh crore and is valued at about Rs 5,000 crore. It is one of India’s 10 largest Asset Management Companies (AMCs). A team headed by the fund’s president Kalpen Parekh will lead operations, according to an email sent by Kothari to investors.
DSP BlackRock Mutual Fund was originally a joint venture between DSP and Merrill Lynch, called DSP Merrill Lynch. BlackRock took over Merrill Lynch in 2008 after the global financial crisis and hence the fund became DSP BlackRock. DSP is a 150-year-old Indian financial services group headed by Hemendra Kothari. BlackRock is the world’s largest asset manager.
What should investors do?
It is difficult to say at this point whether the end of the joint venture is a reason for investors to leave. The loss of BlackRock with its immense resources and expertise is a matter of concern. However, DSP may well be able to maintain performance and standards on its own. The DSP Group was the majority partner (60% stake) in the joint venture.