Bajaj Finserv and Allianz Global Investors will set up an 49:51 joint venture to promote a mutual fund. The new company will apply to the relevant authorities, including Sebi for permission to start a new mutual fund. The JV will come up when the uptrend in stock markets is making investors wonder if the bottom is behind them.
Bajaj Allianz is the second largest player in the general insurance sector with a gross premium underwritten of Rs 2,408 crore in April-Feb’09. It also holds second position in the life insurance sector with first year premium of Rs 5,130 crore during April-Feb’09. In both sectors, ICICI Bank’s joint ventures-ICICI Lombard and ICICI Prudential Life- occupy number one positions.
In the joint venture, though Allianz has a slightly higher stake, the press statement says that it will be equally managed. Details of the investments in the proposed AMC have not been disclosed. Though insurance and mutual fund products compete for funds in the market, the group’s distribution network can be used to market both products, and synergies can be sought in fund management and operations too.