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Birla Mutual Fund plans to outsource fund accounting

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KOLKATA, Nov. 23

BIRLA Mutual Fund has proposed to outsource fund accounting for all its 14 domestic schemes. It has initiated talks on the subject with two major fund accounting service providers - Deutsche Bank and J P Morgan.

The outsourcing proposal is in tune with the fund's plan to offer quality service to its investors at reasonable costs, said Mr S.K. Mitra, head of Birla MF. The idea is to maintain fund accounting expenses at their current levels and even economise on this front in future, he added.

It is also felt that fund accounting taken from an external agency would add value to investors. Birla's insurance venture with Sun Life, incidentally, already outsources its fund accounting facility.

"A majority - in fact, about 90 per cent - of the players in developed markets access fund accounting from outside," Mr Mitra said. He was addressing a press meet on Friday.

It may be mentioned here that professional fund accounting currently is taking off in India, especially with more and more asset management companies going in for contracts with players like Deutsche Bank.

The MF has also started offering gift certificates for its flagship debt scheme, Birla Income Plus, in denominations of Rs 1,000 and Rs 500. These are to be sold through its regular distributors.

On another front, Birla MF has proposed to enlarge its portfolio advisory services (PAS) business. The latter has been initiated recently, and the fund (which has engaged two full-timers for the job) caters to around a dozen clients.

The MF has now planned to take in more clients on a selective basis, Mr Mitra told newspersons. It will also explore opportunities in the NRI segment. The intention here is to provide customised solutions to private clients, some of whom may be willing to take aggressive calls on various kinds of securities.

"It should be possible for us to charge higher fees for individual clients in case we really perform well," he said, adding that the PAS business should help the MF earn substantially in course of time.

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