India’s Money Managers Enjoy Strong Asset Growth India’s fund managers are enjoying strong asset growth but regulatory changes and investor preference for low-margin fixed-income funds are putting pressure on managers’ profits, according to Institutional Investor’s annual survey of the industry.
A series of changes designed to reduce costs and increase transparency for mutual fund investors — capped by the abolition last year of entry-load fees — has put pressure on profit margins without, as yet, spurring a big increase in investor demand, executives say. Fund management companies are looking to cut costs and develop new business lines, such as subadvising for international fund managers, to generate growth. “Too many changes have happened too fast, which has slowed down the industry growth for the short term,” says Sundeep Sikka, CEO of Reliance Capital Asset Management Co.
Reliance retains its place at the top of the India 20, Institutional Investor’s fifth annual exclusive ranking of the country’s asset managers, but its lead over rivals has narrowed. The firm’s assets grew by 25.8 percent, to $24.5 billion, in the 12 months ended March 31. ICICI Prudential Asset Management Co. holds on to second place, with $18 billion in assets, up 81 percent for the year. UTI Asset Management Co. gains one place, to third, after its assets rose 89.1 percent, to $17.8 billion.
Assets of the India 20 grew by 64.7 percent during the year, to $150 billion, faster than the overall industry’s growth rate of 47.1 percent, reflecting growing concentration in the market.
How the Ranking Was Compiled Institutional Investor’s fifth annual ranking identifies India’s top 20 fund managers by assets. New York–based Senior Editor Jane B. Kenney and Mumbai-based Contributing Editor Niraj Bhatt compiled the ranking from questionnaires filled out by the institutions themselves. II refined this data through follow-up faxes, e-mails and telephone calls. When official data were unavailable, II obtained figures from web sites and other public sources. All figures are in millions of dollars as of March 31, converted from rupees using the exchange rate on that date.