Financial Daily from THE HINDU group of publications
Thursday, Dec 05, 2002
Financial Daily from THE HINDU group of publications Thursday, Dec 05, 2002 |
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Markets
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Asset Management Companies Former Pioneer ITI chief plans to set up AMC Nilanjan Dey
KOLKATA, Dec. 4 A FEW months after the curtains came down on Pioneer ITI Mutual Fund, courtesy a successful takeover bid mounted by Franklin Templeton Investments, Mr Vivek Reddy, who helped set up India's first private sector mutual fund, is closer to finalising his next project — an asset management firm. He has already been joined by Mr Prem Khatri, formerly in-charge of business development at Pioneer ITI, who says he has started to "informally" assist his one-time colleague for setting up the proposed venture. In two interviews conducted separately, both Mr Reddy and Mr Khatri confirmed that the project was a few months away from completion, ending speculation on the progress made by their venture. Interestingly, the possibility of acquiring an existing mutual fund is not being ruled out. "At this stage, I do not wish to state for sure whether it would be an acquisition or a start-up. It could be one or the other, with or without a partner," Mr Reddy said, adding that he has had talks with potential investors on a possible tie-up. "Each option has its merits and demerits," he said. The duo are currently trying to put in place what one of them described as the "mechanical" aspects of the venture — the basic infrastructure that will support a mutual fund business in India. The current regulations governing mutual funds require the involvement of sponsors, trustees and investment managers. For example, the new sponsor, trustee and investment manager for the schemes managed by the erstwhile Pioneer ITI MF are Templeton International Inc, Templeton Trust Services Pvt Ltd and Templeton Asset Management (India) Pvt Ltd respectively. It may be mentioned here that the debut by Kothari Pioneer (the original name of the Chennai-based outfit) happened nearly 10 years ago, and the private sector asset management business has grown enormously since the early 1990s. The industry currently manages well over Rs 1,00,000 crore, roughly a third of which is with the Unit Trust of India, the single-largest family of funds. From only a handful of private undertakings in those early days, the industry plays host to nearly 40 asset management companies. In fact, Mr Reddy's new role materialises at a time when the scenario is marked by talks of a possible recast initiated by two leading overseas players — Zurich and Alliance Capital. And, understandably, he is checking out the situation to ascertain what exactly is happening.
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