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Aarti Krishnan

THE takeover of the assets of Pioneer ITI AMC by Templeton Asset Management makes the latter the second largest mutual fund in India after the Unit Trust of India. After the takeover of Pioneer ITI's funds, the Templeton-Pioneer ITI combine would now manage around Rs 8,100 crore in assets, putting its size ahead of competitors such as Prudential ICICI AMC (which manages Rs 7,300 crore), Birla Sun Life AMC (Rs 4,000 crore) and Alliance Capital Investment Management (Rs 3,500 crore).

Templeton would still appear to be dwarfed by UTI, which manages around Rs 51,900 crore in net assets. But given that around 71 per cent of the assets managed by UTI are under close-ended schemes (where unitholders are locked into their investment), this may not be a correct comparison.

The spate of takeovers in the MF industry certainly leaves investors with fewer choices. The top three funds in the private sector now control around a third of the assets managed by all funds outside of UTI.

However, it remains to be seen as to whether the larger scale of operations after consolidation brings some indirect benefits to unitholders, at least in the form of a lower cost structure of schemes.

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