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New York-headquartered hedge fund BlackRock Inc has acquired the 40 per cent stake held by Merrill Lynch in mutual fund DSP Merrill Lynch Fund Managers, in a move that signals the world's fifth largest asset manager's entry into the booming Indian market.
The remaining 60 per cent will continue to be held by the DSP Group (Hemendra Kothari and his associate companies).
Globally, BlackRock Inc manages $1.3 trillion worth assets, nearly the market capitalisation of the Indian stock market.
Following the deal, which requires regulatory clearances, the Indian asset management company will be renamed DSP BlackRock Investment Managers. The mutual fund house will be renamed DSP BlackRock Mutual Fund.
The stake sale is in line with the realignment of Merrill Lynch's asset management business globally. DSP Merrill Lynch Fund Managers was formed in 1996.
On September 29, 2006, Merrill Lynch combined its investment management business, Merrill Lynch Investment managers, with BlackRock in exchange for a 49 per cent economic stake in the merged enterprise to form a new entity that operates under the BlackRock brand.
At that time, BlackRock had kept its option open on the joint venture in India.
"The technology platform and expertise that the BlackRock team will provide to the joint venture will further strengthen our franchise," said Hemendra Kothari, chairman, DSP ML Fund Managers.
DSPML's World Gold fund, launched last year, is a feeder fund that invests in BlackRock's World Gold fund.
"We may bring several products such as these and offshore funds that would enable American investors to participate in the India growth story through this joint venture," said Peter Swarbreck, chief operating officer (Asia Pacific Region), BlackRock.
DSP Merrill Lynch Fund Managers had Rs 34,083.7 crore assets of under management as on December 31.
