Investment giant T Rowe Price group has acquired a 26 per cent stake in UTI Asset Management Company Limited (UTI AMC/ UTIMF) and UTI Trustee Company Pvt Ltd for Rs 650 crore (around $138 million). The transaction, which is subject to receipt of requisite regulatory approvals, is expected to close in the fourth quarter of 2009.

The US company acquired 6.5 per cent each from four sponsors of UTI AMC — State Bank of India, Punjab National Bank, Bank of Baroda and Life Insurance Corporation of India — which hold 25 per cent each in UTI AMC. They will each retain 18.5 per cent stake in UTIA MC after the stake sale.

UTI AMC is the fourth largest mutual fund in India and the country’s oldest mutual fund institution. With approximately Rs 80,740 crore ($17.2 billion) in average assets under management in October (10.1 per cent market share of the mutual fund industry in India), UTI serves more than 9.75 million individual and institutional investor accounts in India and offers a broad array of domestic fixed-income and equity mutual fund strategies. T Rowe Price is acquiring its stake from the existing stockholders.

T Rowe Price president and CEO James Kennedy said: “We are excited about this opportunity to form a cooperative relationship with UTI, a leading investment manager with a strong reputation in India. Their general investment approach and client-focused model also lends itself to a solid cultural fit between our two companies.”

According to Kennedy, this provides T Rowe Price an opportunity to participate directly in the growth potential of India’s asset management industry. “The UTI investment also reflects our firm’s commitment to sustaining the global expansion of our investment management, distribution, and related services capabilities. T Rowe Price has seen a sharp expansion in its global investment capabilities and investor base over the past decade, and the firm is well positioned to take advantage of attractive growth opportunities overseas,” he said.

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