India-based financial service firm Cosmea Financial Holdings (CFH) has struck a joint venture (JV) partnership with wealth tech startup Orowealth to launch a digital-first mutual fund business.

The JV, which will be known as Torus Oro Asset Management Company (AMC), will mark CHF’s entry into the mutual fund space, reported BusinessLine.

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Under the agreement, CHF will have a 74% stake in Torus while the remaining 26% will be held by Orowealth.

The two companies have approached the Securities and Exchange Board of India (SEBI) for an asset management company license.

The business is expected to launch later this year after obtaining necessary regulatory approvals.

It will leverage CFH’s capital and its distribution capabilities and OroWealth’s technology as well as its distribution tie-ups with banks and telecom.

According to the companies, Torus Oro AMC will majorly focus on smart beta, passive, international and retirement offerings.

It targets to achieve around $1.3bn (INR100bn) in assets under management (AUM) in the next three years.

Nitin Agarwal, who is one of the founding members of Orowealth, is the designated CEO for the AMC entity.

Agarwal said: “The mutual fund industry is going through a tectonic shift driven by technology and innovation. We are excited about building a digital AMC with a technology-first approach across the three verticals — distribution, fund management and operations.”

“We will empower distribution partners and customers with sophisticated portfolio analytics tools, use cutting edge data analysis techniques to augment fund research and optimise fund operations with automation.”

In September last year, Livemint reported that SEBI is planning to allow private equity funds to own local AMCs.