IDFC MF is now Bandhan Mutual Fund; L&T MF merges with HSBC Mutual Fund

The AMCs had announced its merger transactions recently, now they have completed the formalities

Padmaja Choudhury   /   December 7, 2022

In the last few weeks, you might have heard of two mutual fund houses being acquired by another company. And, as an investor, you might wonder if these acquisitions affect you as an investor

It depends on the firm that is acquiring the fund house.

Let us look at two recent activities.

Bandhan Bank taking over IDFC Mutual Fund

IDFC Mutual Fund will now be known as Bandhan Mutual Fund after the market regulator okayed the change in ownership.

A group made up of Bandhan Financial Holdings Limited (BFHL), GIC, and ChrysCapital has bought IDFC Mutual Fund. The Reserve Bank of India (RBI), which oversees the banking industry, also gave its permission last month.

After the proposed transfer is complete, BFHL will possess around 60% of IDFC AMC, while GIC and ChrysCapital will own about 20%.

This makes Bandhan Financial Holdings Limited (BFHL) the newly acquired mutual fund sponsor.

However, this takeover will not lead to any change in the fund management as a press release by the fund house had mentioned that the present management and investing operations team will remain the same.

The complete transfer will require a few weeks.

Present investors might be allowed to exit from the funds without any exit load.

Investors have nothing to worry about as Bandhan Bank don’t have a mutual fund arm and the fund manager team will remain the same.

The takeover of L&T MF by HSBC MF

This acquisition is different. It is because these two are already in the mutual fund industry, and both of the fund houses have their own schemes.

Schemes of the same kind from both fund houses are often merged when one fund house is sold or combined with another. Fund houses must do it because a fund house can have only one fund from each of the categories specified by the fund house.

For instance, equity funds will combine with the new entity’s equity plans. Debt, hybrid, and every other sort of scheme will also be combined with the same kind of scheme of the new organisation. This can occasionally result in a modification of the fund’s management and core characteristics.

In this merged entity, Ravi Menon and Kailash Kulkarni will have joint leadership duties as co-CEOs. Venugopal Mangat will serve as the Chief Investment Officer (Equity), and Sriram Ramanathan will serve as the Chief Investment Officer (Debt).

It would be better to look at these funds’ performance if you are an investor of any merged funds before taking any action.

You can talk to your financial advisor if you are in doubt.


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