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personalfn-blog · 6 years ago
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Should Change In Controlling Stake At DSP BlackRock Mutual Fund Worry You?
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In May 2018, the US-based BlackRock Inc., the world’s largest asset manager, stated that it would sell its 40% stake in DSP BlackRock Investment Managers Pvt Ltd (the AMC) to its joint venture partner DSP Group.
Subsequently, the Board of Directors of the AMC and Trustee Company, DSP BlackRock Trustee Company Pvt Ltd approved this change in controlling stake on May 7, 2018, and later the capital market regulator, SEBI, too waved the no-objection flag.
However, the investors in various schemes of DSP BlackRock Mutual Fund (now known as DSP Mutual Fund) got a bit worried. The Average Assets Under Management (AAUM) managed by DSP Mutual Fund is over Rs 89,400 crore as per the data from the Association of Mutual Funds in India (AMFI) as on June 30, 2018.
Should investors be worried?
(Image source: pixabay.com)
BlackRock Inc. and the DSP Group have mutually agreed to terminate their joint venture (formed in 2008).
With the above transaction, the DSP Group, a 152-year-old firm and a respected one, headed by Mr Hemendra Kothari, will increase its stake to 100% and will be DSP Investment Managers Pvt Ltd.
Fund sponsors:
The sponsors of the DSP Mutual Fund will now be DSP ADIKO Holdings Pvt Ltd and DSP HMK Holdings Pvt Ltd (collectively referred as “DSP entities”). BlackRock Inc. will cease to be the co-sponsor.
DSP ADIKO Holdings Pvt Ltd and DSP HMK Holdings Pvt Ltd are companies incorporated in 1983 under the Companies Act, 1956 and are also registered with the Reserve Bank of India (RBI) as non-deposit taking Non-Banking Finance Companies. These companies have been functioning as investment companies.
The financial performance of fund sponsors:
The financial performance of the past three years for the aforesaid private limited companies as cited in a communiqué to the unit-holders by the fund houses is as under:
(Source:
Letter to unitholders
)
The DSP entities along with Ms Aditi Kothari Desai and Ms Shuchi Kothari (daughters of Mr Hemendra Kothari) will own 100% of the shares of the AMC. And the DSP entities will own 100% of the shares of the Trustee Company, DSP Trustee Pvt Ltd (formerly known as DSP BlackRock Trustee Company Pvt Ltd.)
Ms Aditi Kothari Desai holds a Bachelor of Science degree in Economics from the Wharton School of the University of Pennsylvania and an MBA from Harvard Business School. Currently, she is the Executive Vice President heading sales and marketing at the AMC, as well as a member of the Executive Committee.
Aditi holds over two decades of experience. She joined Merrill Lynch’s investment banking group in New York in 1998, primarily working on M&A activities in the Financial Institutions Group. Subsequently, Aditi worked in DSP Merrill Lynch as part of the fixed income sales team and later joined DSP BlackRock in 2002 (then DSP Merrill Lynch Fund Managers), working on various initiatives, including establishing an offshore fund for foreign investors.
Ms Shuchi Kothari holds a Bachelor of Science in Economics from the Wharton Business School at the University of Pennsylvania in Philadelphia, USA and an MBA from the Harvard Business School. Shuchi is a passionate wildlife enthusiast and a trustee of Wildlife Conservation Trust, whose Chairman is Mr Hemendra Kothari. She is also the Trustee of Hemendra Kothari Foundation (HKF), the Director of Health & Glow Retailing Pvt Ltd and Foodworld Supermarkets Pvt Ltd.
With the change in controlling stake, the AMC and the trustee company will now be closely held by Mr Hemendra Kothari and his daughters. However, this does not alter the basic characteristics of the schemes (including investment objectives) of the fund house, now known as DSP Mutual Fund.
What should an investor do?
With the exit of BlackRock Inc. the DSP group envisages an exciting phase deeply founded on the focus and core tenets of the DSP Group’s philosophy, namely:
The conviction in India’s growth story
The singular focus on asset management in a scientific, professional, process-driven manner
The unwavering belief in managing investors’ money with the right values and principles. Discipline, ethics, integrity, analytical rigour and risk management are the core pillars of the group, on which the group aims to deliver good investment outcomes for its investors.
Fostering a collaborative environment for smart, innovative, and ambitious people to do their best work
Innate culture and DNA that will drive value for investors.
The letter from the fund house to its unitholders also says, “Our team is aligned in values, thinks big and has set the highest standards, which gives the belief that the DSP Group’s future will be bright.”
So far, a number of schemes of the fund house have generated wealth for investors. Going forward, the DSP Group assures you, the investors, that your interest will always be at the core of its business and it will always maintain a relentless focus on doing what’s best for you.
Yet, if you aren’t comfortable with BlackRock Inc. selling its 40% stake in the joint venture, the fund house has provided an option to exit without any exit load, which can be exercised from August 14, 2018 - to September 12, 2018, until 3:00 p.m.
(Source: pexels.com)
In our view, rushing to sell or redeem your units would not be a prudent idea. A number of schemes of the fund house—across categories— have fared well, adequately compensated investors for the risk taken. Many schemes have displayed consistent performance across market cycles owing to strong investment processes and systems at the fund house and a galaxy of stalwarts at the helm of affairs.
Hence, it would be prudent to ‘wait-and-watch’ for at least around 6 to 12 months and evaluate how the schemes of the fund house perform.
Currently, if you think any of your mutual fund schemes aren’t performing or you are unsure of the health of your mutual fund portfolio, opt for PersonalFN's Mutual Fund Portfolio Review service.
[Read: Unsure When To Review Your Mutual Fund Portfolio? Read This!]
PersonalFN’s SEBI-registered investment advisers, who effectively serve as Financial Guardians, will guide you ethically and in an unbiased manner keeping in mind your age, risk profile, investment objectives, financial goals, and the time horizon before goals befall.  You can reach out to PersonalFN on 022-61361200 or e-mail at [email protected]
Happy Investing!
Author: Rounaq Neroy
This post on " Should Change In Controlling Stake At DSP BlackRock Mutual Fund Worry You? " appeared first on "PersonalFN"
0 notes
personalfn-blog · 6 years ago
Text
Should Change In Controlling Stake At DSP BlackRock Mutual Fund Worry You?
Tumblr media
In May 2018, the US-based BlackRock Inc., the world’s largest asset manager, stated that it would sell its 40% stake in DSP BlackRock Investment Managers Pvt Ltd (the AMC) to its joint venture partner DSP Group.
Subsequently, the Board of Directors of the AMC and Trustee Company, DSP BlackRock Trustee Company Pvt Ltd approved this change in controlling stake on May 7, 2018, and later the capital market regulator, SEBI, too waved the no-objection flag.
However, the investors in various schemes of DSP BlackRock Mutual Fund (now known as DSP Mutual Fund) got a bit worried. The Average Assets Under Management (AAUM) managed by DSP Mutual Fund is over Rs 89,400 crore as per the data from the Association of Mutual Funds in India (AMFI) as on June 30, 2018.
Should investors be worried?
(Image source: pixabay.com)
BlackRock Inc. and the DSP Group have mutually agreed to terminate their joint venture (formed in 2008).
With the above transaction, the DSP Group, a 152-year-old firm and a respected one, headed by Mr Hemendra Kothari, will increase its stake to 100% and will be DSP Investment Managers Pvt Ltd.
Fund sponsors:
The sponsors of the DSP Mutual Fund will now be DSP ADIKO Holdings Pvt Ltd and DSP HMK Holdings Pvt Ltd (collectively referred as “DSP entities”). BlackRock Inc. will cease to be the co-sponsor.
DSP ADIKO Holdings Pvt Ltd and DSP HMK Holdings Pvt Ltd are companies incorporated in 1983 under the Companies Act, 1956 and are also registered with the Reserve Bank of India (RBI) as non-deposit taking Non-Banking Finance Companies. These companies have been functioning as investment companies.
The financial performance of fund sponsors:
The financial performance of the past three years for the aforesaid private limited companies as cited in a communiqué to the unit-holders by the fund houses is as under:
(Source:
Letter to unitholders
)
The DSP entities along with Ms Aditi Kothari Desai and Ms Shuchi Kothari (daughters of Mr Hemendra Kothari) will own 100% of the shares of the AMC. And the DSP entities will own 100% of the shares of the Trustee Company, DSP Trustee Pvt Ltd (formerly known as DSP BlackRock Trustee Company Pvt Ltd.)
Ms Aditi Kothari Desai holds a Bachelor of Science degree in Economics from the Wharton School of the University of Pennsylvania and an MBA from Harvard Business School. Currently, she is the Executive Vice President heading sales and marketing at the AMC, as well as a member of the Executive Committee.
Aditi holds over two decades of experience. She joined Merrill Lynch’s investment banking group in New York in 1998, primarily working on M&A activities in the Financial Institutions Group. Subsequently, Aditi worked in DSP Merrill Lynch as part of the fixed income sales team and later joined DSP BlackRock in 2002 (then DSP Merrill Lynch Fund Managers), working on various initiatives, including establishing an offshore fund for foreign investors.
Ms Shuchi Kothari holds a Bachelor of Science in Economics from the Wharton Business School at the University of Pennsylvania in Philadelphia, USA and an MBA from the Harvard Business School. Shuchi is a passionate wildlife enthusiast and a trustee of Wildlife Conservation Trust, whose Chairman is Mr Hemendra Kothari. She is also the Trustee of Hemendra Kothari Foundation (HKF), the Director of Health & Glow Retailing Pvt Ltd and Foodworld Supermarkets Pvt Ltd.
With the change in controlling stake, the AMC and the trustee company will now be closely held by Mr Hemendra Kothari and his daughters. However, this does not alter the basic characteristics of the schemes (including investment objectives) of the fund house, now known as DSP Mutual Fund.
What should an investor do?
With the exit of BlackRock Inc. the DSP group envisages an exciting phase deeply founded on the focus and core tenets of the DSP Group’s philosophy, namely:
The conviction in India’s growth story
The singular focus on asset management in a scientific, professional, process-driven manner
The unwavering belief in managing investors’ money with the right values and principles. Discipline, ethics, integrity, analytical rigour and risk management are the core pillars of the group, on which the group aims to deliver good investment outcomes for its investors.
Fostering a collaborative environment for smart, innovative, and ambitious people to do their best work
Innate culture and DNA that will drive value for investors.
The letter from the fund house to its unitholders also says, “Our team is aligned in values, thinks big and has set the highest standards, which gives the belief that the DSP Group’s future will be bright.”
So far, a number of schemes of the fund house have generated wealth for investors. Going forward, the DSP Group assures you, the investors, that your interest will always be at the core of its business and it will always maintain a relentless focus on doing what’s best for you.
Yet, if you aren’t comfortable with BlackRock Inc. selling its 40% stake in the joint venture, the fund house has provided an option to exit without any exit load, which can be exercised from August 14, 2018 - to September 12, 2018, until 3:00 p.m.
(Source: pexels.com)
In our view, rushing to sell or redeem your units would not be a prudent idea. A number of schemes of the fund house—across categories— have fared well, adequately compensated investors for the risk taken. Many schemes have displayed consistent performance across market cycles owing to strong investment processes and systems at the fund house and a galaxy of stalwarts at the helm of affairs.
Hence, it would be prudent to ‘wait-and-watch’ for at least around 6 to 12 months and evaluate how the schemes of the fund house perform.
Currently, if you think any of your mutual fund schemes aren’t performing or you are unsure of the health of your mutual fund portfolio, opt for PersonalFN's Mutual Fund Portfolio Review service.
[Read: Unsure When To Review Your Mutual Fund Portfolio? Read This!]
PersonalFN’s SEBI-registered investment advisers, who effectively serve as Financial Guardians, will guide you ethically and in an unbiased manner keeping in mind your age, risk profile, investment objectives, financial goals, and the time horizon before goals befall.  You can reach out to PersonalFN on 022-61361200 or e-mail at [email protected]
Happy Investing!
Author: Rounaq Neroy
This post on " Should Change In Controlling Stake At DSP BlackRock Mutual Fund Worry You? " appeared first on "PersonalFN"
0 notes