Mumbai: Tata Asset Management Ltd is in talks to sell 26-49% in its mutual fund business to a foreign strategic partner, said two people familiar with the plan.

The Tata group company has held discussions with some of the world’s largest fund managers, including US-based Vanguard Group and Germany’s Allianz SE, the people said, requesting anonymity.

“The plan is to globalize the asset management business by getting a strategic partner, which will hold at least 26% stake in Tata AMC. The talks with potential foreign partners for the mutual fund venture happened recently and things are yet to be formalized," said one of the two people.

Tata Sons Ltd owns 67.91% in Tata Asset Management; the remaining stake is held by Tata Investment Corp. Ltd.

“Tata has global ambitions too and if a strong global player is willing to come here and sell its products through us, I think the synergy will be very strong," said Hormuz A. Balsara, chief operating officer of Tata Asset Management.

Balsara said Tata will always retain a majority stake in the asset management company.

“We have been interacting with Vanguard and Allianz in the past and we are not averse to further interactions also. We have been also interacting with Japanese and Belgian asset management firms and if it makes sense, we will definitely look at a tie-up with a global name," said Balsara.

Spokespersons for Vanguard and Allianz declined to comment.

A strong foreign strategic partner will help Tata AMC distribute its products in offshore markets, bring and sell mutual fund products in India and strengthen its investment advisory and fund management expertise, according to the second of the two people cited earlier.

Tata MF has lagged behind industry growth for the past few years. While the industry’s actual assets have grown by 129% from Rs7.59 trillion to Rs17.37 trillion since December 2012, Tata MF’s actual assets have grown by 102%.

A strong global partner may help Tata Asset Management improve its position in the Rs17 trillion domestic mutual fund industry, where the company managed assets worth Rs38,270 crore in the December quarter, according to data from the Association of Mutual Funds in India.

With strong inflows into mutual funds, the country’s mutual fund industry is witnessing its best phase since the Lehman Brothers Inc. crisis. Global asset management giants such as Vanguard and Allianz have been scouting for a strong partner to enter India.

If Tata Asset Management gets a strategic partner, it will take care of all other requirements for growing the business, said Dhirendra Kumar, CEO of New Delhi-based MF analytics firm Value Research India Pvt. Ltd.

Tata Asset Management’s profits have also dwindled. According to Value Research, Tata MF’s net profit has fallen from Rs31.36 crore for the year ended 31 March 2012 to Rs5.25 crore in the year ended 31 March 2016, the latest period for which data is available.

“I agree that Tata MF has undersold itself for some time, but we have better plans and we are capable of much more. Our philosophy has been to tie up with people who bring very specific strategic advantages to the table and Tata has its own strong ways of doing business, which we would not like to dilute," said Balsara.

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