Bolstering its presence in India, Japanese insurer Nippon Life is to acquire a 26% stake in Reliance Capital Asset Management (RCAM), India’s second-biggest asset manager.
The deal with Reliance Capital, a unit of Indian conglomerate Reliance ADA Group, is worth ¥22bn ($285m) and represents the largest yet foreign direct investment in India’s asset management industry. The deal will reduce Reliance Capital’s stake in RCAM from 53% to 27%.
Nippon Life’s acquisition of a stake in RCAM is the second it has concluded with Reliance Capital. In March 2011, the Japanese insurer announced that it had agreed to purchase a 26% stake in Reliance Life for some $680m, the largest foreign direct investment yet in India’s financial services industry.
RCAM was established in 1996 and reported assets under management of INR931bn ($19bn) at the end of September 2011. This gave it a 13% share of the Indian asset management market. RCAM’s primary focus is on mutual funds.