Sundaram Asset Management to buy Principal Asset Management for undisclosed sum

Sundaram Asset Management Company on Thursday announced acquiring smaller rival Principal Asset Management for an undisclosed sum.

Principal has over Rs 7,447 crore in assets under management as on December 2020, with 90 per cent of them being in equity-oriented schemes.

The deal involves acquisition of the schemes managed by Principal Asset Management, and a 100 per cent buyout of the share capital of Principal Asset Management Pvt. Ltd, Principal Trustee Company Pvt. Ltd, and Principal Retirement Advisors Pvt. Ltd, as per an official statement.

Sunil Subramaniam, Managing Director of Sundaram Asset Management Company said the acquisition will complement the 25-year-old company's business that is traditionally been weighted towards the mid and small-cap segment.

''This transaction will strengthen our presence in the marketplace with the addition of a range of schemes with a good long term performance track record across the large and mid-cap segments,'' he said.

Pedro Borda, Chief Operating Officer of Principal International, said the decision to exit has been made after a ''systematic review of the company's portfolio of businesses and global market dynamics''.

T T Srinivasaraghavan, Managing Director of Sundaram Finance, the parent company, said the deal is a ''natural step'' in its aspiration to become a sizeable player in the asset management industry.

The transaction is subject to necessary regulatory approvals and Sebi prescribed processes, and Principal will continue to operate the businesses until the deal is closed, the statement said.

Both Sundaram and Principal will work to ensure that there will be no disruption of service to their partners and investors in the interim, and a seamless transfer once approval is obtained, it added.

Principal will continue operations of Principal Global Services in Pune and Hyderabad to provide critical technical support and services to its offices around the globe.