By Michle Harrison MFS Investment Management is to provide the fund management expertise for its new...
MFS Investment Management is to provide the fund management expertise for its new joint venture with Birla Sun Life Asset Management in Mumbai, India. The new group is called the Birla Sun Life Asset Management Company and is 50% owned by each group.
MFS Investment Management, the American mutual fund manager and a subsidiary of Sun Life, will be providing the new venture's president, and the chief executive, Jeremy Beswick, will shortly be moving to Mumbai.
Beswick said: "The fund management industry in India is still in its infancy and we see tremendous opportunities there. The domestic market is enormous with over 930 million people and a national savings rate of over 20%.
"A few years ago, the Indian government decided to allow private companies into the
fund management industry. Until then the only player was the government-owned Unit Trust of India (UTI). Our company is now the second largest player."
UTI still dominates the market with approximately 85% of the market share.
Beswick added: "Our intention is to expand our market share in India aggressively and increase the profitability of the
In addition, the asset management company has two offshore funds that invest in the Indian equity market. One is registered in Canada, the other in Mauritius. There too the intention is to be more aggressive in the marketing of the funds, looking beyond the non-resident Indian market.
Another insurance company, British group CGU, is also looking at the potential in
the Indian fund management industry. CGU's asset management subsidiary, Morley Fund Management, has signed a memorandum of understanding with UTI.
Joseph Mariathasan, head of product development at Morley said: "We are hoping that when UTI is eventually allowed to invest abroad, it will use Morley to do it."
UTI currently has over $14bn of assets under management.
"Another area of interest is the sizeable non-resident Indian market where there could be strong interest in Morley's
CGU and UTI have been working together since April 1997 when they launched the India Access fund, a Mauritius-based fund that tracks the Indian stock market.
Pradeep Kumar, chief representative of UTI in London, said: "Another possible area of co-operation is in countries seeking to development their fund management industry.
"UTI and Morley make a strong team. With our 97,000 agents and our 46 million accounts in India, we can provide distribution expertise, while Morley carries a lot of weight in the management of international assets."
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