Religare plans expansion and acquisitions in Asia
The asset management arm of the financial services group Religare is looking for acquisitions to help it expand in Asia beyond its home base in India. Religare is considering asset management firms with at least $1 billion in assets under management in Hong Kong, and also wants to hire sales and placement staff.
It is targeting $80bn to $100bn of assets under management within four years. $1 billion has been earmarked to fund the building of the franchise. So far, the firm manages assets of $15 billion and has spent about $400 million.
“The majority of worldwide growth over the next few years will come out of Asia, and we want to help affiliates tap that growth,” says Rahul Desai, managing director and head of Asia for Religare Global Asset Management. The company last year bought a 55% stake of Landmark Partners, a private equity and real estate fund-of-funds focused on secondary transactions, for $171.5 million. The firm also took a majority stake in US private equity firm Northgate Capital and Aviate Global, a brokerage in Hong Kong. In 2009, Religare Capital Markets bought London stockbroker Hichens Harrison.
To develop distribution in Japan, Religare acquired KBC Financial Products. The Japanese regulators have cleared Religare to distribute its managed fund products. The group has also applied for a licence to manage money directly for domestic Japanese clients.
Desai, who previously worked for Softbank Investments, oversaw Religare’s new distribution centre in Tokyo. He says he’s now looking to create a new distribution centre in Hong Kong and to replicate it in Australia, Singapore, Dubai, Europe and New York.
Asia’s fast-growing asset management business is looking increasingly crowded. Western firms are moving in or bulking up, and more Asian fund houses are expanding beyond domestic markets. Firms such as India’s Reliance Capital Asset Management, Aditya Birla Sun Life Asset Management, Nikko of Japan and Korea’s Mirae Asset, have all expanded within the region.
Desai says Religare will sell different types of fund, such as private equity or hedge funds through Northgate or Landmark - as well a range of mutual funds. In India, the firm recently launched a domestic equities mutual fund focused on small and mid-cap companies that raised $105 million in three weeks. Desai says the firm is looking at thematic products, based for example on the public sector and utilities. “We want to launch [Indian] mutual funds that are more innovative and unique, than the near-identical offerings currently available.”