BlackRock Rejoins India, Partners with Tycoon Mukesh Ambani's Financial Arm

BlackRock has entered into a significant partnership with the financial services division of India's tycoon Mukesh Ambani, which opens doors for the world's largest money manager to gain a foothold in India's rapidly growing asset management market.

BlackRock, with $9.4 trillion in assets under management as of the end of June, together with Jio Financial Services, plan to invest up to $150 million each in the 50-50 venture, as stated in a Wednesday announcement. The joint venture will be called Jio BlackRock.

Larry Fink, the chairman and CEO of BlackRock, said in a post on his LinkedIn page, “Today marks a major move for BlackRock as we work to expand our footprint through a forthcoming joint venture in India with Jio Financial Services, a company built by Reliance Industries Limited.”

Mukesh Ambani, the founder and chairman of Indian conglomerate Reliance Industries, holds the place of being India's richest person in Forbes list, with a net worth of $90.6 billion. Reliance Industries is the largest listed company by market share in India. Previously, Jio Financial Services was reportedly spun off from its parent company Reliance Industries.

The collaboration seeks to “deliver our combined expertise and scale to unlock the power of investing for millions of people in India,” added Fink. The “digital-first” service will deliver “tech-enabled access to affordable, innovative investment solutions” for India’s investors, the statement said.

“The partnership will leverage BlackRock’s deep expertise in investment and risk management along with the technology capability and deep market expertise of JFS to drive digital delivery of products,” Hitesh Sethia, CEO of Jio Financial Services said.

The establishment of the joint venture depends on customary closing conditions and regulatory approvals.

This endeavor marks BlackRock's second attempt to enter India's flourishing asset management industry. In 2018, the U.S. investment management firm divested from India after a decade of operations in the country, selling its 40% stake in an asset management venture to its partner, DSP Group. According to Rachel Lord, head of Asia-Pacific at BlackRock, India represents an “enormously important opportunity” .

Assets under management of Indian mutual funds doubled, amounting to 44.39 trillion rupees ($542 billion) in the five years to June this year, as estimated by the Association of Mutual Funds in India.

“The convergence of rising affluence, favorable demographics and digital transformation across industries is reshaping the market in incredible ways,” Lord noted, adding the partnership will “revolutionize India’s asset management industry.”

(Source: CNBC)