The Hindu Business Line : Sundaram Mutual beefs up sales team

SUNDARAM Mutual Fund has strengthened its sales force to prepare itself for a change it anticipates in the mutual fund industry - corporate clients and banks would lose ground to retail clients.

"We are aware its purely high net worth individuals and retail story," says Mr T.P. Raman, Managing Director of the asset management company. He estimates that corporates and banks currently contribute about 75-80 per cent of the assets the industry manages.

Mr Raman linked the expected change to the likelihood of a strong economic growth in future. Robust growth would suck in banks' money and also provide corporates with opportunities. Consequently, their investments in mutual funds would fall.

Mr Raman expected a simultaneous increase in investments by retail investors, especially in products such as monthly income plan. He felt the retail segment had warmed to opportunities provided by mutual funds.

Reaching retail clients is expected to be more expensive in the beginning because of the relatively bigger role played by distributors. Mr Raman, however, felt that the increasing importance of retail clients would be profitable eventually because they tend to stay invested longer than corporates.