DWS, the asset management arm of Deutsche Bank, is set to acquire a 40% stake in Nippon Life India Asset Management's alternative investment fund (AIF) arm. This strategic move aims to bolster DWS's alternative investment platform and broaden its global product reach.

Nippon Life India AIF Management (NIAIF), a wholly-owned subsidiary of Nippon Life India Asset Management, will issue new shares to DWS in consideration for the capital infusion. Both companies have signed a memorandum of understanding, and the deal is now subject to regulatory approvals.

The partnership between DWS and Nippon Life India is geared towards expanding their product range and attracting offshore investors by leveraging DWS's extensive global network. The collaboration also includes plans to launch passive products for the Indian and UCITS (Undertakings for Collective Investment in Transferable Securities) markets, as well as co-develop actively managed, India-focused funds for global distribution. UCITS funds are mutual funds that are widely sold throughout European nations, offering investment opportunities for Indians under the liberalized remittance scheme, which has a limit of $250,000 a year.

Stefan Hoops, CEO of DWS, emphasized India's significance as a core growth market for global asset managers in the coming decades, highlighting it as a long-term strategic ambition for DWS. Hoops stated that the agreements address key priorities for DWS, including driving growth in alternatives and passive investments, leveraging strong partnerships in Asia, and pursuing the goal of becoming a "top 5 in top 5" company.

Sundeep Sikka, Executive Director and CEO of Nippon Life India Asset Management, noted that the partnership will enable the company to provide world-class investment access to both global and Indian investors through passive strategies and global distribution. NIAIF has a solid track record, having raised approximately $1 billion in investor commitments over the past decade.

This collaboration builds upon an existing relationship between Nippon Life and DWS, where Nippon Life holds a 5% stake in DWS, acquired when Deutsche Bank listed DWS in 2018. Since then, the two companies have maintained a strategic alliance, collaborating in areas such as distribution and research.

The move aligns with DWS's broader strategy of expanding its presence in Asia and capitalizing on the growth potential of the Indian market. India, with its growing middle class, is increasingly becoming a focus for foreign financial firms. This partnership also comes after a breakdown in talks for a separate DWS joint venture in China, underscoring the company's commitment to pursuing growth opportunities in the Asian market.