This month has been interesting for the mutual fund industry.
The latest one to receive an ‘in-principle approval’ from SEBI to start its mutual fund business in India is DLF Pramerica Mutual Fund. This is a joint venture between U.S. life insurance major, Prudential Financial (PFI) and real estate company, DLF.
Earlier this month, brokerage India Infoline received an in-principle nod from SEBI for sponsoring a mutual fund. Recruitments for the asset management business began a few months ago with the hiring of Deepesh Pandey, (ex-Deputy CIO of Mirae Asset, Singapore) and Manish Srivastava (ex-Fund Manager of Halbis - HSBC Global Asset Management- Singapore).
Ironically, the times could not have been worse. October recorded a massive liquidity and confidence crisis that sent fund houses reeling. Consequently, many fund houses are rethinking their strategy and business models.
The massive redemptions in liquid funds coupled with a tumbling equity market resulted in Assets Under Management (AUM) crumbling. Reliance Mutual Fund lost Rs 15,400 crore in its assets from the previous month (September), ICICI Prudential Mutual Fund, Rs 10,594 crore and HDFC Mutual Fund, Rs 6,519 crore. The highest percentage fall in assets was seen in Mirae Asset Mutual Fund (57%) and AIG Global Investment Group Mutual Fund (44%).
While the ‘in-principle’ nods will keep coming in, it will more crucial to see which fund houses are being sold out and which have plans to shut shop. After all, it was also in November that Religare AEGON acquired Lotus Mutual Fund.
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