The D. E. Shaw group is a global investment and technology development firm

Mukesh Ambani’s Reliance Industries Limited has announced plans to enter the financial services business in India. This means that RIL may soon offer mutual funds, insurance products and at a later stage may set up a bank as well.

For this the company has struck a joint venture agreement with a private equity (or hedge) fund called D.E. Shaw. The D. E. Shaw group is a global investment and technology development firm with close to $20 billion in aggregate investment capital.

The joint venture marks the entry of Mukesh Ambani into new economy businesses so far dominated by his brother Anil. So far RIL has been mostly into old economy businesses that include exploration and production, chemicals, refining, gas and power while Anil Ambani’s firms have new economy businesses like financial services (Reliance Capital), entertainment (Reliance Broadcast) and telecom (Reliance Communications).

Commenting on the new initiative Mukesh Ambani said, “Reliance is delighted to partner with the D.E. Shaw group in the financial services domain. The D.E. Shaw group is a natural partner for Reliance. Together, we look forward to participating in the growing Indian financial services sector.”

In May 2010, the two brothers had scrapped a non-compete agreement (barring a few exceptions) signed during the demerger of the Reliance conglomerate in 2006. The scrapping of the non-compete agreement enabled both brothers to venture into sectors that had earlier been reserved for one of them.