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Edelweiss Gets The Green Signal

With an approval from SEBI, Edelweiss becomes the latest entrant in India's mutual fund industry

It is a 33-member family and it has a new entrant. Edelweiss Capital, an investment bank and broker, is the latest to receive the regulatory approval from SEBI to start its mutual fund business. The approval can be attributed to low penetration levels and the increasing percentage of the population moving towards a higher savings and investment mindset.

The already existing 33 players in the Indian mutual fund industry comprises a number of global players. The industry manages assets worth Rs. 5.7 billion, as on 30th April, 2008.

Some of the newest players in this field include Mirae Asset, JP Morgan, and AIG Global. Others like Credit Agricole, Shinsei Bank, Fortis, Barclays, Goldman Sachs and Aviva are expected to enter soon. A couple of firms from Middle-East Asia will soon make inroads in the Indian AMC business as well.

Rashesh Shah, Chairman, Edelweiss Group said, “The plan to launch a mutual fund is in keeping with our long term strategy of building a diversified financial services company offering products and services across asset classes. Our vision is to become an innovative and universally renowned asset manager providing excellent investment solutions, exemplary services and setting the highest ethical standards.” Edelweiss's expertise as a broker and as a portfolio management services provider will also add to its mutual fund business foray.

Edelweiss Asset Management Ltd plans to launch 8-9 products over the next 12 months. The product portfolio will include broad based equity funds, structured products, arbitrage funds, ETFs, and other innovative fixed income and equity funds in line with the requirements of the market.

Several domestic entities too are vying for the growing asset management pie which is expected to grow at around 33 per cent year-on-year to $350 - $440 billion by 2012 (McKinsey estimates). Of late, Indiabulls has also received the nod for setting up an AMC and IDFC acquired Standard Chartered's mutual fund business to the asset management business.