DSP & BlackRock Part Ways in Mutual Fund Joint Venture
Two decades ago, the DSP Group saw a significant opportunity and began its journey in the asset management space in India along with global giant, BlackRock.
Today, under the joint venture, DSP BlackRock Investment Managers Pvt. Ltd., they have created wealth for lakhs of investors and are counted among India’s most respected investment management firms.
DSP BlackRock Mutual Fund to Become Only DSP Mutual Fund
DSP BlackRock has been in the news for quite some time now for rumours of DSP and BlackRock parting ways from the joint venture (JV).
But now both have confirmed the news.
DSP Group will be buying off the 40% stake held by BlackRock.
DSP BlackRock Investment Managers Pvt. Ltd is a joint venture between the Indian based DSP Group & USA based BlackRock.
In the past, this AMC was called DSP Merill Lynch but was renamed after the takeover of Merill Lynch by BlackRock.
No BlackRock in DSP BlackRock Mutual Fund
DSP BlackRock Investment Managers Pvt. Ltd is one of the top 10 fund houses in India and managed assets worth about ₹860 billion as on March 31, 2018.
There has been speculation in the business media about the split for the last couple of weeks.
Business Standard reported on 23rd April 2018, first reported that the DSP Group and BlackRock have started discussions about ending their existing 60:40 joint venture in the asset management company DSP BlackRock
Also, according to the report, BlackRock is keen on continuing the business alone and is considering buying out DSP’s 60% stake in the asset management firm.
But in actuality, it is the other way around.
On Monday, 7th may 2018, BlackRock and DSP Group have ended their mutual fund joint venture DSP BlackRock Investment Managers Pvt. Ltd. Under an agreement, the DSP Group will buy out the 40% stake held by BlackRock in the venture.
As of today, the DSP Group holds a controlling stake in DSP BlackRock Investment Managers and owns 60%.
After all necessary regulatory approvals, DSP group will increase its stake to 100%. Thereafter, will be renamed as “DSP Investment Managers“.
Blackrock said in the release that “The sale is expected to complete, subject to regulatory approval, once naming transfers and investment scheme unit holder communications are finalized.”
Mr. Kothari, chairman of DSP Group said in a release that “We embarked on a journey together nearly a decade ago and have built an institution with solid processes and systems that will thrive and stand the test of time.”
The valuation for the deal was not disclosed by either of the firms. It is also not clear if DSP and BlackRock will get into a non compete agreement after their split from the current joint venture.
Historically, deals in the Indian asset management space have happened at 5-7% of AUM, implying a deal size of around ₹ 50 billion.
- The strong brand credentials of DSP BlackRock AMC,
- Its ranking among the mutual fund industry (9th among over 40 AMCs on AUM) and
- The strong growth in the mutual fund business of Indian (AUM for Q4 FY18 grew 26% for the industry)
Also globally, BlackRock is an aggressive and well established financial player and may not be content with remaining a minority partner for long, especially considering the exponential growth of asset managers in India.
Mr. Laurence Fink, chairman and CEO of BlackRock said in an interview that “BlackRock remains deeply committed to India, and we look forward to having a continued positive impact on the asset management industry in the country.”
What Should DSP BlackRock Investors Do?
DSP BlackRock Investment Managers Pvt. Ltd is one of the top 10 fund houses in India and managed assets worth about ₹860 billion as on March 31, 2018.
They are managing money for over 18 lakh investors from all walks of life which include salaried individuals, high net worth individuals, NRIs, small and mid-sized business owners, large private & public corporations, trusts and foreign institutions.
Over the years, DSP BlackRock Mutual Funds played a key role in the creation of wealth for many investors.
According to Deepak Chhabria, chief executive officer, and director, Axiom Financial Services Ltd., “All processes and systems at DSP BlackRock are in place. Uncertainty definitely disturbs investors, especially in volatile markets, though it may have nil or minimum impact. But I don’t think it will impact investors at DSP BlackRock much. Promoter background is also good,”.
Details of DSP BlackRock Investment Managers Pvt. Ltd.
DSP BlackRock is a joint venture between the 150-year-old Indian financial firm, DSP Group and the world’s largest investment management firm, BlackRock. They are one of the premier asset management companies in India, with over 20 years of track record of investment excellence.
The DSP Group, headed by Mr. Hemendra Kothari, is one of the oldest and most respected financial services firms in India. The firm commenced its stockbroking business in the 1860s and the family behind the group has been very influential in the growth and professionalization of capital markets and money management business in India.
BlackRock is the world’s largest investment management firm and is trusted to manage more money than any other investment firm in the world. Millions of retail investors, small and big companies from around the world, governments, large global foundations trust BlackRock with their money.
BlackRock is headquartered out of New York City. Founded in 1988 initially as a risk management and fixed income institutional asset manager, BlackRock today is one of the world’s largest investment management firms. It operates globally through 70 offices across 30 countries, with clients from over 100 countries.
DSP BlackRock mutual fund is reckoned in the Indian mutual fund industry for its expertise in both equity & debt fund management. Let us look into this mutual fund company in detail.
DSP BlackRock Key Information
| Mutual Fund | DSP BlackRock Mutual Fund |
| Setup Date | 16th December 1996 |
| Incorporation Date | 13th May 1996 |
| Sponsor | DSP HMK Holdings Pvt. Ltd & DSP Adiko Holdings Pvt. Ltd (collectively) & BlackRock Inc. |
| Trustee | DSP BlackRock Trustee Company Pvt. Limited. |
| President | Mr. Kalpen Parekh |
| CIO – Equities | Mr. Anup Maheshwari |
| Assets Managed | Rs. 86325.70 crore (31st March 2018) |
DSP BlackRock has an experienced team of investment professionals with expertise in domestic capital markets and access to expertise from over 135 investment teams at BlackRock, spread over 30 countries and 70 offices worldwide.
DSP BlackRock mutual fund house is a highly reputed AMC in Indian mutual fund industry and have been giving good performing schemes for past 20 years to mutual fund investors. So, don’t panic and stay invested in DSP BlackRock funds for now.
For new investors who are looking for investing in DSP BlackRock mutual fund schemes, these are some of DSP BlackRock’s top 5 mutual fund schemes:
- DSP BlackRock Natural Resources & New Energy Fund – Direct – Growth
- DSP BlackRock Opportunities Fund – Direct – Growth
- DSP BlackRock Focus Fund – Direct – Growth
- DSP BlackRock Balanced Fund – Direct – Growth
- DSP BlackRock India Tiger Fund – Direct – Growth
Remember, don’t just run for returns from investment for investing in mutual funds. There are a lot of factors you should look into before selecting a fund that will match your investment goals.
Following the 3 things you should always remember before investing in Mutual Funds :
- Don’t blindly invest in the fund with the highest returns. Invest based on the duration you want to invest for.
- Every person’s financial condition is different. Evaluate the funds you invest in yourself – don’t invest in a fund because of its popularity.
- Review your investment from time to time but not too often. Once a few weeks is good enough.
Happy Investing!
Disclaimer: the views expressed here are of the author and do not reflect those of Groww.