The Hindu Business Line : Reliance Capital MF sheds 5% stake to Eton Park for Rs 501 cr

Mumbai, Dec. 12 Reliance Capital Ltd today announced that Eton Park, a global investment fund, has agreed to pick up five per cent equity stake in its 100-per cent subsidiary, Reliance Capital Asset Management Ltd, for Rs 501 crore.

The subsidiary would be issuing fresh capital which would be picked up by the global investment institution. The money would be used for financing the expansion of its domestic and international operations, the company said in a press release.

Speaking to Business Line, a spokesperson of Reliance Capital said that the asset management subsidiary has a network of roughly 300 outlets and plans to expand the network so as to be present across 800 outlets, particularly to smaller towns and rural areas which have demonstrated considerable potential for retail savings.

In addition, the company also plans to expand into West Asia, the UK, the US and the Far East, wherethere is a strong non-resident Indian community present, the spokesperson said. The company also plans to target funds from institutional investors in these countries whose exposure into the Indian market is serviced by foreign institutional investors registered here , he said. The company has already received permission from the Securities and Exchange Board of India to float an offshore fund, he pointed out. RCAM has Rs 77,764 crore assets under management as on November 30.

According to the company, the proposed investment values Reliance mutual fund at Rs 10,000 crore, which is 13 per cent of the assets under management. The company spokesperson also claimed that this is the highest valuation secured for an asset management company in India.

The transaction will close in January 2008 once the definitive documentation and necessary approvals are completed.

Eton Park currently manages over $ 10 billion through its offices in New York, London and Hong Kong.