The Hindu Business Line : A.V. Birla eyes pension funds sector

It is exploring the possibility of acquisitions and adding pension funds to its forte that now mainly comprises insurance, mutual funds and distribution.

The group, which already manages close to Rs 10,000 crore through domestic and offshore funds, has begun to aggressively push its insurance business. It is also ready to tap the opportunities that are expected to emerge in pensions, especially so after the establishment of the pension regulator.

Mr S.K. Mitra, who heads financial services at the A.V. Birla group, is of the view that its efforts may have to be substantiated even by strategic takeovers of smaller asset management outfits.

In the past it had looked at acquiring Alliance Capital, a fund house that was up for sale at that juncture but is now running independently. However, no other company is being considered at the moment.

"We will examine growth possibilities, both organic and inorganic. The idea is to strengthen our existing operations and develop new ones. Growth in future will come by way of new products and forays into uncharted markets," he maintained, adding that some of the relatively smaller businesses have the potential of growing into bigger affairs.

Two such activities are PAS or `portfolio advisory services' (better known as PMS, as in the case of a few other players) and insurance broking. The former allows Birla Mutual Fund (now supervised by its new CEO, Mr S.V. Prasad) to provide tailor-made solutions to high net worth clients - a concept that has grown quite popular in recent times.

Insurance broking, for which a separate company has been formed, is also an emerging area in which the group has recently developed an interest. Mr Mitra said business on this front is catching up fast in line with changing market conditions. The PAS initiative, as well the two offshore funds run by it, has helped bolster the assets handled by the group, it is pointed out. The latest tally of assets stands at Rs 9,800 crore, marginally down from the Rs 10,000-plus figure that was recorded not very long ago.

Elsewhere, the equity funds managed by the group are readying to take exposure to some of the capital issues that are coming to the primary market.

Moves closer to sale of Birla Sun Life

THE A.V. Birla group has secured stock exchanges' approval for sale of its broking venture, following its deal with the NRI conglomerate, J.V. Gokal. The proposal now needs a nod from the regulators.

"SEBI will have to allow the sale of Birla Sun Life Securities," Mr Mitra said, referring to action taken by the NSE and the BSE and pointing to the fact that the group did not see enough value in the securities broking company.

The sale will help it focus more on core activities such as asset management and distribution. The latter is overseen by Birla Sun Life Distribution, which sells select investment products offered by both the group and other players.