LIC Mutual Fund: Reinventing itself

It was the public sector that flagged off the first set of mutual funds in India, with UTI's debut in 1964 followed by SBI Mutual Fund in 1985. Amid hectic consolidation and entries and exits by private-sector players and foreign asset-management companies, some of the original public sector-sponsored asset-management companies have stood the test of time. They have survived the last two decades, with their many ups and downs for the markets and changing investor preferences, by re-inventing themselves to keep up with the times. LIC Mutual Fund, one of the oldest fund houses, was established in 1989. Sponsored by India's largest domestic institutional investor, the Life Insurance Corporation, it is in the midst of such a reinvention. In the last couple of years, this public-sector asset manager has effected a comprehensive overhaul of its top management, schemes, mandates and investment processes for a sharper focus on investors. This has begun to pay off in the form of strong growth in assets under management. Back to growth In the last five years, from March 2012 to March 2017, AMFI data show that LIC Mutual Fund's assets under management (AUM) have expanded nearly four-fold, from ₹5,799 crore to ₹21,475 crore. A significant part of this increase has been managed in just the last two years. From ₹9,313 crore in end-March 2015, the assets have burgeoned to ₹21,475 crore by March 2017. True, this has been a period when both debt and equity mutual funds have gained renewed traction with retail investors on the back of supportive market conditions. But LIC Mutual Fund's AUM growth, at 130 per cent over the last two years, has outpaced the industry's asset growth of 54 per cent, showing its rising popularity with investors. Strengthening the core team In May 2016, LIC Mutual Fund's ownership structure underwent a change after Japanese financial giant Nomura completely exited the joint venture which