KBC Asset Management, part of the Belgian KBC Group, has joined forces with Union Bank of India to set up a joint-venture asset management company in India.

KBC Asset Management is to take a 49 per cent stake in the new business, with Union Bank of India owning 51 per cent.

The shareholders’ agreement on the joint venture was formally signed late last week by André Bergen, chief executive of KBC Group, and Mavila Vishwanathan Nair, chairman and managing director of Union Bank of India.

Mr Nair said: “The Indian mutual fund industry has been growing at a rapid pace of 47 per cent year-on-year over the last five years. However, current penetration levels are just 4-5 per cent, clearly indicating the vast untapped potential in this area. These factors clearly show that the Indian mutual fund industry is at a nascent stage and there is ample scope for growth in the coming years, especially in the retail segment.”

The two firm’s joint venture is to be named Union KBC Asset Management and will be based in Mumbai. Hires will mostly be made locally and “only a few expat staff from KBC will be joining,” a spokesperson for KBC told WealthBriefing.

Union Bank of India, which is to be the majority shareholder of the joint asset management venture, is a prominent public sector bank which has a network of 2,593 outlets across India, and serves 20 million customers. 

KBC Asset Management is mainly active in KBC’s home markets of Belgium and Central and Eastern Europe, but is increasing its activities in growth markets such as China, Taiwan, Hong Kong, South Korea, New Zealand, Spain, the Netherlands, the US, Switzerland, Germany and Austria.  Last year the firm set up joint ventures and co-operation agreements in China, Taiwan and New Zealand.  KBC’s assets under management were approximately $219.72 billion at 30 September.