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All in the family

Fund houses witness 36% growth in assets managed for group companies

All in the family

Leading fund houses are seeing a sharp rise in assets parked by group companies, shows data for the past twelve months. According to data gathered by Value Research, the average assets under management (AAUM), contributed by sponsors and their associates at 38 AMCs, touched about ₹66,000 crore at the end of June 2016. This marks a growth of nearly 36% from about ₹48,600 crore a year ago. This pace of AAUM growth is over 1.5 times the clip at which overall industry assets have grown between June 2015 and June 2016. Such assets are mostly in liquid/debt schemes and group allocation to equity products is usually low.

Fund houses are required by SEBI to disclose the exact amount of investments by their sponsor and associates in their schemes. A large portion of assets from sponsors or associates comes from surplus cash or treasury money deployed in fixed income products for yield and liquidity. Sponsors and associates mostly prefer direct plans. Almost 85% of sponsor and associate AAUM was invested through direct plans. 10% came from associate distributors, 5% from non-associate distributors and a negligible ₹0.03 crore from direct agents.

Biggest players
At an industry level, sponsors and associates contributed 4.46% of total AAUM at the end of June 2016, higher than the 3.95% they contributed in 2015. Birla Sun Life Mutual Fund, part of the diverse Aditya Birla conglomerate, was the biggest in terms of such AAUM with about ₹12,223 crore from sponsors and associates. However, these constitute only 7.92% of its total assets. It was followed by HDFC Mutual Fund with about 9,925 crore from sponsors and associates. However, these amounted to only 5% of HDFC Mutual Fund's assets. Other big fund houses, namely Reliance, UTI, Tata, DSP Blackrock and Kotak Mahindra also had less than 10% of assets sourced from sponsors and associates. Here's a list of funds that had the highest proportion of assets coming from sponsors and associates.

Mutual Fund% from Sponsor and Associates
Shriram Mutual Fund0.21
Canara Robeco0.18
Union KBC0.16
Motilal Oswal0.16

Overall, 17 fund houses saw the share of sponsor AAUM of total pie go up. The biggest gainers are IIFL Mutual Fund (25.26 percentage point rise), Motilal Oswal Mutual Fund (15.18 percentage point rise) and Canara Robeco Mutual Fund (11.94 percentage point rise).

21 fund houses saw the share of sponsor AAUM in their assets decline. The AMCs that saw the sharpest drops include Peerless Mutual Fund (9.30 percentage point drop), Union KBC Mutual Fund (4.94 percentage point drop) and Shriram Mutual Fund (4.80 percentage point drop).