Dec. 12 (Bloomberg) -- Eton Park Capital Management LP, the hedge-fund firm founded by former Goldman Sachs Group Inc. partner Eric Mindich, acquired a stake in Reliance Capital Asset Management Ltd., India's biggest mutual fund.

Eton Park bought 5 percent of the unit of Reliance Capital Ltd., controlled by Anil Ambani, India's third-richest man, the Mumbai-based company said in a statement. Eton Park will pay 5.01 billion rupees ($127 million) for the stake, valuing the company at 100 billion rupees.

Mindich oversees $10 billion including stocks and distressed debt as well as private-equity investments in developing countries. Prudential Financial Inc. and Shinsei Bank Ltd. are forming asset-management ventures in India, where record economic growth has driven a doubling in the stock market in a year.

The proposed investment values the money manager at about 13 percent of assets under management, the company said. Reliance Capital Asset's valuation translates into a price of 400 rupees per share of Reliance Capital.

Reliance Capital shares have risen fourfold this year to a record 2,511.5 rupees today on the Bombay Stock Exchange, valuing the financial services company at $15.6 billion.

Reliance Mutual Fund manages 773 billion rupees, or 14.6 percent of the 5.3 trillion rupees managed by Indian Funds at the end of October, according to data on Bloomberg.

Overseas Alliances

Tokyo-based Shinsei Bank plans to team up with Indian billionaire Rakesh Jhunjhunwala to sell mutual funds in the world's second-fastest growing major economy, two people with direct knowledge of the matter said last month.

Prudential Financial, the second-largest U.S. life insurer, said on Dec. 4 it will acquire a 61 percent stake in a mutual fund venture with DLF Ltd., India's largest real estate developer.

Mindich started Eton Park in 2004 with $3.5 billion, a record for a hedge-fund startup size at the time. Eton Park's investment returns were about 30 percent this year through Oct. 31. That compares with the 12 percent average gain by hedge funds globally, according to Hedge Fund Research.

Hedge funds are private, largely unregulated pools of capital whose managers can buy or sell any assets and participate substantially in profits from money invested.

To contact the reporter on this story: Pooja Thakur in Mumbai at pthakur@bloomberg.net.

Last Updated: December 12, 2007 05:33 EST