NEW DELHI, Dec 23 (Reuters) - HSBC (HSBA.L) is buying the mutual fund arm of India"s L&T Finance Holdings (LTFH.NS) for $425 million, it said on Thursday, as it looks to build up its wealth business in Asia. Under a strategy spearheaded by Group CEO Noel Quinn, HSBC is ploughing $3.5 billion into its wealth and personal banking business - including asset management - in line with its ambition to become Asia"s top wealth manager by 2025. HSBC intends to merge L&T Investment Management Limited (LTIM) with its $1.6 billion asset management operation in India, HSBC and L&T (LTFH.NS) said in separate statements. "Combining LTIM with our existing Indian asset management business gives us the scale, reach and capabilities to capture some of the 15-20% annual asset management market growth expected in India over the next five years," Quinn said in an HSBC statement. L&T Investment Management Limited has assets under management of over 800 billion Indian rupees ($10.65 billion). The deal will make HSBC a top 10 asset manager in India, Nuno Matos, HSBC"s CEO of wealth and personal banking, told Reuters. Asia is the biggest region for HSBC, and the wealth and personal banking unit contributed 44% or $22 billion to the London-headquartered lender"s adjusted global revenue last year. HSBC said in August it was buying French insurer AXA"s Singapore assets for $575 million. read more HSBC could make more purchases in the region, Matos said. "Most of our growth will be organic ... but we continue to look for bespoke acquisitions to improve our capabilities and improve our scale." Dinanath Dubhashi, managing director and CEO of L&T Finance Holdings, said the HSBC deal was in line with L&T"s aim of "unlocking value" from its subsidiaries, adding this would help it to strengthen its balance sheet for its lending business. J.P. Morgan and Citi were the financial advisers to L&T. ($1 = 75.1020 Indian rupees) Reporting by Aftab Ahmed in New Delhi and Carolyn Cohn in London Editing by Alexander Smith and Mark Potter