Updated: December 23, 2021 | 08:51 PM IST

L&T Fin Holdings announced on December 23 that it will be selling L&T Investment Management (LTIM) to HSBC AMC for $425 million.

HSBC AMC will acquire 100 percent equity shares of L&T Investment Management Limited, which is a wholly-owned subsidiary of L&T Fin Holdings – the investment manager of L&T Mutual Fund.

It must be noted that L&T MF is currently the 13th largest fund house in India.

MONEYCONTROL HAD EARLIER REPORTED THAT HSBC IS IN ADVANCED TALKS WITH L&T FINANCE HOLDINGS TO BUY ITS MUTUAL FUND ARM.

Apart from an aggregate purchase consideration of $425 million, LTFH will be entitled to excess cash in LTIM until the completion of the acquisition. In the meantime, both LTIM and HSBC AMC will ensure that there is continuity of services to their investors and counterparties.

L&T said in a regulatory filing on December 23: “the board of directors of L&T Finance Holdings Limited at its meeting held today considered the sale of 100 percent of the paid-up share capital of L&T Investment Management Ltd, a wholly owned subsidiary of the company and the asset manager of L&T Mutual Fund, to HSBC Asset Management (India) Private Limited (HSBC AMC), which sale will be subject to receipt of requisite regulatory approvals (‘proposed transaction’).”

“The transaction with HSBC is in line with our strategic objective of unlocking value from our subsidiaries which will help us to strengthen our balance sheet for our lending business. When seen alongside the recent capital raise it provides us with enough ammunition to increase the pace of retailisation in our lending portfolio, which is one of our long-term goals," said, Dinanath Dubhashi, Managing Director & CEO, L&T Finance Holdings Ltd.

With the sale of LTIM, the schemes it manages will be managed by HSBC AMC in the future. A board of trustees of HSBC Mutual Fund will be appointed as the trustee of the schemes of L&T Mutual Fund and some of its schemes will be merged with those of HSBC’s.

HSBC intends to merge the operations of LTIM with that of its existing asset management business in India, which had assets under management (AUM) of Rs 117 billion as of September 2021.