Foreign entries into IndiaÆs asset-management industry continue to increase. Following recent deals by AIG, Axa Investment Management and UBS Global Asset Management, the latest firm to establish an India business is Robeco Asset Management.

The $185 billion Dutch asset manager has taken a 49% stake in Canbank Investment Management Services, a small. $500 million fund manager owned by state-owned Canara Bank. The renamed fund house, now called Canara Robeco, will rely on Canara Bank for distribution and RobecoÆs expertise to develop products.

ôWe think Canara Robeco can have 5% market share in five or six years,ö says Constant Korthout, CFO at Robeco Group in Rotterdam.

Robeco Asset Management has a small presence in other regional jurisdictions, including a rep office in Japan as well as a business selling products through third parties in Hong Kong and Singapore. The Canara deal is its biggest commitment to Asia so far, and Korthout says the firm wants to build on this elsewhere. At some point it may open offices in Hong Kong or Singapore, or develop an onshore business in China û but step by step.

The parties have not yet announced who will serve as the JVÆs CEO. They continue to interview candidates. But it is likely to be an Indian national, while Robeco will second some professionals from the Netherlands to help the JV build expertise in various functions.

Korthout says Canaro is a good compliment to Robeco. ôThey have distribution and needed to strengthen their asset-management skills. They have asset management as a strategic focus; itÆs not something on the side.ö He adds the firm will eventually develop third-party distribution channels in India û and also manufacture products that Robeco can sell into Europe.

The initial emphasis is on developing India equities capabilities, as well as sustainable/socially responsible investment strategies for the local market. RobecoÆs Japanese operation has prospered by selling yen-denominated structured products, and this may be something that it can replicate in India as well.

Canara Bank, established in 1906 and 73% owned by the government, is the largest nationalised bank in India in terms of aggregate loans and deposits business. Its asset size is valued at $30 billion. It boasts a network of 2,550 branches nationwide serving 29 million customers.