Recently L&T Mutual Fund House has been acquired by HSBC Mutual Fund. What will change post the deal, what is the current condition of both the mutual funds, and what should investors do, let’s discuss this all in this article as we move ahead.
L&T Mutual Fund Gets Acquired by HSBC Mutual Fund:
About L&T Mutual Fund:
- Recently L&T Mutual Fund was acquired by the HSBC Mutual Fund which has also got the SEBI approval and the work will be started towards the final process of the acquisition.
- The management of L&T has said that the group has been selling this Asset Management Company (AMC) business as it does not falls into its core business. The core business of the L&T group is Infrastructure and Information Technology.
- The group felt that this AMC business was not going as per the plan and hence they wanted to sell it.
- HSBC Mutual Fund which is acquiring L&T Mutual Fund is India’s 24th biggest Mutual Fund house with Asset Under Management (AUM) of around Rs. 14,000 Cr. Whereas L&T Mutual Fund is the 14th largest AMC in India with an AUM size of around Rs. 71,000 Cr.
- L&T Mutual Funds is having 12 Equity Funds, 12 Debt Funds, and 5 Hybrid Funds. Whereas HSBC Mutual Fund is having 8 Equity Funds, 5 Debt Funds, 2 Hybrid Funds, and 7 Funds of Funds (FOFs).
- Between the L&T Mutual Fund and HSBC Mutual Fund, 16 funds are overlapping, and most likely these funds will be merged.
What Should Investors Do?
- L&T Mutual Fund is one of the oldest mutual funds in India which started in the year 1996.
- The major turnaround for the L&T Mutual Fund was back in 2009 when it acquired Fidelity Mutual Fund to increase focus on the India business.
With the acquisition of L&T Mutual Fund, HSBC Mutual Fund will become a big player in the AMC sector. Overall, L&T AMC is having around 29 mutual fund schemes but the funds have underperformed or given near-to-category average returns in the last 2-3 years. Since the investor has not taken any action yet on this underperformance, he/she can follow the strategy of ‘Wait & Watch’ and should evaluate the performance of the funds post the deal. One should follow due diligence before making any investment decisions.