Canara Bank of India and Netherlands-based asset manager Robeco have established a joint asset management venture in India, Canara Robeco, which is intended to develop the Indian bank's existing asset management arm, Canbank Mutual Fund, into an industry leader that complements plain vanilla traditional funds with structured and alternative products.
Canara Bank, one of the largest banks in India, has strong relationships with public-sector pension institutions and a 30 million-strong customer base through its 2,500-branch nationwide distribution network, while Robeco has wide-ranging asset management expertise in Europe and the US.
The partnership will be one of equals in terms of governance, with Canara Bank retaining 51 per cent of the shares. The joint venture seeks a 50:50 balance between retail and institutional clients, as well as between equity and other products, in terms of assets under management.
Sri M.B.N. Rao, Canara Bank's chairman and managing director, says: 'This partnership is complementary in nature. Canara Bank's excellent presence in the Indian financial industry provides volume, while Robeco, with its wealth of experience and broad-ranging asset management expertise, will focus on generating higher margins on that volume through strategic actions, operational and process improvements.'
Canara Robeco Asset Management will offer a comprehensive range of schemes to investors across India consisting of plain vanilla funds and a flagship fund in every major asset class. In the next phase, plain vanilla funds with a twist will be introduced, followed by structured and alternative products.
Once the pension market develops, enhanced index funds will be introduced. The joint venture will position itself as a full spectrum player, not only providing traditional products, but also seeking to popularise innovative products reserved for niche market segments.
Says Robeco chief executive George Möller: 'Robeco sees the Indian market as having sizeable business potential. With international global focus now directed towards India, it is increasingly more attractive for global players to create synergies between themselves and strong Indian partners. Robeco has planned to enter India's mutual fund industry via this promising joint venture.'
Rabo India Finance, a wholly owned subsidiary of Rabobank International in India, was the sole adviser to Robeco on the transaction.
As the operationally-independent asset management arm of the Rabobank Group,
Robeco provides discretionary asset management products and services and a full range of mutual funds, including fixed-income and equity investments as well as balanced accounts, money-market funds and alternative investments, to institutional and retail clients worldwide.
Robeco, which distributes its funds for the retail market directly and through other financial institutions, and which has listed several of its mutual funds on major European stock exchanges such as Amsterdam, Paris, Frankfurt and London, is based in Rotterdam and has offices in Belgium, France, Germany, Luxembourg, Poland, Spain and Switzerland within Europe and in the US cities of New York, Boston, Greenbrae, Los Angeles, Honolulu and Toledo, as well as in Bahrain and Japan.