Azimut buys stake in Iranian manager to develop local market

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Azimut buys stake in Iranian manager to develop local market

Italian asset management group Azimut has entered into an agreement to acquire 20% of Mofid Entekhab (Entekhab), the largest independent asset management company of Iran, part of Iranian financial advisory and brokerage group Mofid.

Azimut will purchase from Mofid Securities 20% of Entekhab, through its subsidiary AZ International Holdings S.A. while Mofid Group will remain majority shareholder.

It is understood Azimut and Mofid will also participate pro rata to a capital increase to finance the business plan to develop a range of investment strategies in local asset classes, to build a local trained sales force providing financial advisory and wealth management services and launch offshore funds for foreign investors.

The partnership will be compliant with economic sanctions requirements, the companies stated.

Azimut and Mofid Securities have signed a shareholders agreement to develop an onshore financial advisory platform and establish an offshore fund enabling foreign investors to access Iranian capital markets.

The Italian manager is said to be the first financial institution entering with an equity investment into a company providing financial services licensed by the local regulator, SEO, in Iran.

Established in 2016, Entekhab had AuM of $89m at the end of September 2017 spread over six mutual funds and managed accounts. The company’s market share in equity funds available in the Iranian market amounted to 8% last September.

Mofid Securities held an almost 7% market share in the brokerage firm universe as of September 2017.

A reason for Azimut to invest in the Iranian asset management market dwells in the economic current situation and prospects of the Islamic Republic of Iran.

The second largest economy in the Middle East, Iran is expected to grow above 4% per annum through 2020 following the lifting of international sanctions in 2016.

Hamid Azaraksh (pictured right), chairman of Mofid Securities, commented: “Mofid’s long standing vision has been targeting value creation for its clients upon a financial services platform acting as a leader in Iranian capital markets. Our strategic goal is now to capitalize on our track record as the leading financial intermediary in Iran and create with Azimut a benchmark for the local asset management industry.

“The challenging goals set for our partnership carries along the benefits of Azimut’s know-how and the benefit of our clients who will be able to access a new suite of financial advisory and wealth management services in line with the highest international standards”.

Sergio Albarelli (pictured left), CEO of Azimut Holding, said: “We are making a historical first step for a global player entering the Iranian financial market. We see the group to pioneer the untapped opportunities of a frontier market which has in fact the full credentials of a large advanced emerging market.

“Mofid adds to its undisputable market leadership a multi decade reputation in brokerage and asset management services, sharing a common base with Azimut core values of independence and commitment to performance. We look forward to leveraging this partnership to jointly add value to local and international clients”.

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