Reliance JFS Partners with BlackRock for Wealth Management Expansion

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Three points you will get to know in this article:

  • JFS said the launch depends on regulatory approval.
  • JV lets JFS offer digital products for all.
  • Jio Financial Services and BlackRock earmarked $300 Mn for Indian asset management in July 2023.

Joint Venture Announcement with BlackRock

Reliance-backed Jio Financial Services (JFS) signed a joint venture (JV) with investment giant BlackRock on Monday, April 15th. The partnership aims to launch wealth management and brokerage ventures. JFS disclosed that it has teamed up with two entities of the US-based firm, BlackRock, Inc and BlackRock Advisors Singapore, to establish these new entities.

JFS announced that at 6:35 PM today, BlackRock, Inc. and BlackRock Advisors Singapore Pte. Ltd. have signed an agreement to establish a 50:50 joint venture for the purpose of conducting wealth management business in India. This includes the formation of a wealth management company and later a brokerage company.

The financial services company stated that the launch of the two entities is contingent upon receiving regulatory and statutory approvals from the relevant authorities. The company, backed by a conglomerate, believes that this step will allow them to provide digital-first products and make investment solutions more accessible to a wider audience.

Expansion and Strategic Collaboration

Interestingly, the latest joint venture announcement follows a previous move by JFS and BlackRock. Together, back in late December 2023, they submitted an application to the Securities and Exchange Board of India (SEBI) for a mutual fund license.

This recent development marks a significant step forward, occurring more than nine months after the initial collaboration between the two companies. Their initial partnership, established in July 2023, introduced the joint venture’s entrance into the Indian asset management sector, operating under the brand name Jio BlackRock. At that time, both entities disclosed their intention to make an initial combined investment of $300 million into the venture.

Against the backdrop of numerous emerging tech firms enhancing their aspirations in asset management, there’s been a surge of launches. Just last month, word got out that Zerodha Fund House was in discussions with multiple investors, aiming to secure up to $100 million.

Moving into 2023, both Zerodha and Groww received the green light from SEBI, the market regulator, to unveil their inaugural index fund. This significant development opened the doors for these two brokerage platforms to step into the mutual fund arena, as they rolled out their respective funds.

Changing Landscape of Asset Management

Meanwhile, fintech companies such as Angel One and PhonePe have also become prominent distributors of mutual fund products. The recent developments in the Indian asset management company (AMC) sector aim to take advantage of increasing wealth, favorable demographics, and digital adoption in the country. At the core of this trend is the INR 49.04 trillion Indian mutual fund industry, which has been experiencing growth since the start of the pandemic.

Reliance-backed Jio Financial Services (JFS) forged a joint venture with BlackRock to establish wealth management and brokerage ventures, awaiting regulatory approvals. This strategic move follows a series of collaborations, including the initial partnership in July 2023, and an application for a mutual fund license in late 2023. The asset management sector in India has witnessed dynamic changes, with emerging tech firms seeking significant investments and regulatory approvals. Moreover, the growing wealth, favorable demographics, and increasing digital adoption have led to a thriving INR 49.04 trillion mutual fund industry, reflecting an evolving financial landscape.

Karan Balodi

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