As more retail investors enter equities through the mutual funds route, new players are lining up to win a share of the rapidly growing domestic asset management business.
At least three new fund houses, including Ireland-based Zyfin Funds and Mahindra and Mahindra Financial Services, are set to throw their hats into the ring, for a share of the industry that currently manages assets worth ₹12 lakh crore.
Zyfin Funds is likely to announce its launch within the next few weeks, according to people in the know. Zyfin (formerly Blufin) is a macro-analytics firm that publishes research and indices on macroeconomics, consumer sentiment and the capital market. The company is backed by investment firms Zodius and Anthemis Group.
Zyfin Funds, according to its website, is set to offer ETF products based on emerging market indices for global investors through an offshore fund platform. Zyfin Holdings will also offer advisory services (with regard to product modelling, theme selection, index generation) to global financial institutions, which will then co-brand their products with Zyfin. Sanjay Sachdev, former CEO of Tata MF, is expected to be the Executive Chairman of Zyfin Funds and Devendra Nevgi the CEO.
M&M Financial Services (Mahindra Finance) has also speeded up the process of launching its own fund house. The company received approval from SEBI in October 2011, but is yet to launch the fund house as it was unsure about entering the market. However, a large MF distributor said, on the condition of anonymity, that the company is working towards setting up its internal processes ahead of receiving final approval from the regulator.
When contacted, Ramesh Iyer, CEO, Mahindra Finance, declined to give details. According to SEBI officials, however, the company’s application for final approval is under process.
Mahindra Finance already has an extensive distribution network in place as it sells mutual funds for other fund houses. It is bound to capitalise on this network to help grow its business.
Earlier this month, YES Bank received RBI approval to set up an MF and will apply for approvals from capital market regulator SEBI.
The bank expects to launch its AMC within a year, and may even take over an existing mid-sized fund house (₹30,000-40,000 crore of assets), Pralay Mondal, Senior Group President — Retail and Business Banking, had told BusinessLine in an earlier interview.
According to the SEBI website, Karvy Stock Broking, Trust Investment Advisors and Fortune Financial Services/ Fortune Credit Capital are awaiting in-principle approval from the regulator on their mutual fund applications.