The BlackRock logo is displayed at their headquarters on November 14, 2022 in New York City. BlackRock and Saudi Arabia’s sovereign wealth fund signed an agreement to jointly explore infrastructure projects in the Middle East.
Leonardo Munoz | Getty Images
BlackRock has joined forces with the financial services arm of India’s tycoon Mukesh Ambani in what’s been referred to as a “major move.”
This paves the way for the world’s largest money manager to gain a foothold into the country’s fast growing asset management market.
BlackRock, which had $9.4 trillion assets under management at the end of June, together with Jio Financial Services, each plan to invest up to $150 million in the 50-50 venture, according to a statement on Wednesday.
The joint venture will be called Jio BlackRock.
“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,” said Larry Fink, chairman and CEO of BlackRock, in a post on his LinkedIn page.
Mukesh Ambani is the founder and chairman of Indian conglomerate Reliance Industries, the country’s largest listed company by market share. The billionaire mogul has been named India’s richest man in Forbes list with a net worth of $90.6 billion.
The partnership will “deliver our combined expertise and scale to unlock the power of investing for millions of people in India,” added Fink.
The convergence of rising affluence, favorable demographics and digital transformation across industries is reshaping the market in incredible ways.
Rachel Lord
head of Asia-Pacific, BlackRock
The news comes just days after Jio Financial Services was spun off from parent Reliance Industries conglomerate, according to Reuters.
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 launch of the joint venture is subject to customary closing conditions and regulatory approvals.
Huge potential
The latest move is BlackRock’s second attempt to gain entry into India’s burgeoning asset management industry.
In 2018, the U.S. investment management firm exited India after being in business for a decade by selling its 40% stake in an asset management venture to partner DSP Group.
India represents an “enormously important opportunity,” said Rachel Lord, head of Asia-Pacific at BlackRock, in the statement.
Assets under management of Indian mutual funds doubled to 44.39 trillion rupees ($542 billion) in the five years to June this year, according to estimates from 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.”