Bank of Baroda chairman and managing director A.K. Khandelwal (right) and Pioneer Investments CEO Dario Frigerio in Mumbai on Friday. (PTI)

Mumbai, Oct. 5: The Bank of Baroda and Italian firm Pioneer Investments have joined hands to float an asset management company.

The agreement for the joint venture, to be named Baroda Pioneer Asset Management Company, was signed today.

The company will start operations early next year. It will initially launch equity, fixed-income and balanced funds and later offer global products to Indian investors.

Pioneer will pick up a 51 per cent stake in Baroda Pioneer for an undisclosed sum.

Bank of Baroda chairman and managing director A.K. Khandelwal said in the first quarter of the next year, the bank should see an improvement in its fee-based income.

The bank’s network of 2,700 branches and around 28 million customers will provide a platform for the mutual fund venture.

Pioneer’s domain expertise will help the venture, Khandelwal said.

“We see ourselves emerging as a major player in the mutual fund sector within four years,” Khandelwal said.

In the first phase, the bank’s branch network will play a key role in building the business. Khandelwal said mutual funds would pick up in the coming years in Tier II and Tier III cities where the bank has a strong presence.

Dario Frigerio, global CEO of Pioneer Investments, said a presence in India and Russia was part of a strategic initiative of the company.

“These are major investments for the future and are examples of the innovative approach we take in creating business opportunities,” he added.