New Delhi, July 28: Principal International Inc., a unit of US-based fund manager Principal Financial Group (PFG), plans to invest Rs 173 crore ($37 million) in its operations this year on expectations of a long-term-opportunity.
“The investments will be completed by the second quarter (July-September) of the current financial year. The funding will come from the parent Principal Financial Group,” said sources.
The new investments will raise the Iowa-based fund manager’s exposure in the country to over Rs 374 crore ($80 million). Currently, PFG manages $ 90 billion in global assets,
The fresh funds will flow into the company’s four subsidiaries — asset management company, pension & insurance, brokerage and distribution units — it has formed with state-run Punjab National Bank (PNB) and Vijaya Bank.
Principal holds the majority 65 per cent equity, PNB 30 per cent and Vijaya Bank 5 per cent in the asset management company, brokerage and distribution units, but 26 per cent equity in the pension and insurance unit under rules laid down by the Insurance Regulatory Development Authority (IRDA).
“The maximum funds will flow into the insurance venture as the 26 per cent stake alone would cost Rs 28 crore,” the source said.
Last month, Principal bought out joint venture partner Industrial Bank of India’s 50 per cent stake in the mutual fund company for Rs 94 crore at Rs 188 a share. It had acquired rival Sun F & C Mutual Fund for Rs 20 crore.
The acquisition of the 23 schemes of Sun F & C worth Rs 475 crore has been cleared by Securities and Exchange Board of India (Sebi), the capital market regulator
Principal, which began its operations in the country in 2000, has about 1,60,000 investors and manages 20 schemes worth Rs 2,000 crore, while the Bombay-based Sun F&C has more than 70,000 investors.