Jio Financial, BlackRock form JV to launch asset management firm

BlackRock Inc, the world’s largest asset manager, is tying up with Jio Financial Services (JFS), the recently spun-off fintech arm of Reliance Industries, to launch an asset management company in India. 

The venture, named Jio BlackRock, will make an initial combined investment of $300 million, marking its entry in the $540 billion (₹44.40 trillion) Indian mutual funds industry.

“Jio BlackRock brings BlackRock’s deep expertise and talent in investment management, risk management, product excellence, access to technology, operations, scale, and intellectual capital around markets, while JFS contributes local market knowledge, digital infrastructure capabilities, and robust execution capabilities,” the companies said in a joint statement. “Together, the partnership will introduce a new player to the India market with a unique combination of scope, scale, and resources.”

Pointed to the immense opportunity that India presents, Rachel Lord, chair and head of APAC at BlackRock, said, “The convergence of rising affluence, favorable demographics, and digital transformation across industries is reshaping the market in incredible ways. We are very excited to be partnering with JFS to revolutionize India’s asset management industry and transform financial futures.”

Hitesh Sethia, president and CEO at Jio Financial Services, 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. Jio BlackRock will be a truly transformational, customer-centric, and digital-first enterprise with the vision to democratize access to financial investment solutions and deliver financial well-being to the doorstep of every Indian.”

Jio BlackRock will commence operations after obtaining the regulatory and statutory approvals, and will have its own management team, the statement said. The JV may take at least a year to commence operations.

The latest development comes after Reliance Industries earlier this month demerged its financial services arm and renamed it Jio Financial Services. 

BlackRock already has a strong presence in India, with offices in Mumbai, Gurgaon, and Bangalore, and a workforce of over 2,400 employees.

BlackRock earlier partnered with asset management firm DSP as a minority stakeholder, holding 40% equity in DSP BlackRock Investment Managers, before exiting the partnership in 2018 citing challenges in integrating the business onto its operating platform.

The joint venture will compete with already established asset management firms such as SBI Mutual Fund, ICICI Prudential Mutual Fund, HDFC Mutual Fund, and Nippon India Mutual Fund.