The Hindu Business Line : `Transfer of GIC Mutual schemes probably in October'

CANBANK Mutual Fund last hit the headlines when it successfully bid to acquire the schemes of GIC Mutual Fund, defeating attempts made by rival fund houses promoted by SBI and LIC. GIC MF is said to have about one lakh investors, spread over five schemes, including a close-ended tax saving plan.

Mr N.R. Ramanujam, MD of Canbank MF, shares with Business Line the fund's strategy with regard to the acquisition. He also dwells on a few other plans.

Excerpts:

Can we expect some consolidation once the GIC MF schemes finally enter your fold?

There is no concrete plan with regard to consolidation at this stage. We will take a view on this matter once the transition finally comes through.

In our view, based on what we have seen so far, the transfer will probably take place in early October. Having said that, let me say that we will have to examine whether any of GIC MF's schemes can run in a parallel manner with those that are our own.

The GIC MF authorities will have to go through a detailed process that has been prescribed by the regulator. This will, among other things, involve writing to investors and offering them what is popularly called an exit window, complete with a no-load proposal. And that may well take some time.

I must add here that merger of schemes after a takeover is not without precedent in the Indian market. The asset management industry has witnessed several M&As already and schemes have been merged after the deals have taken place.

Have all shareholders of GIC MF agreed to the transfer?

Let me tell you right away that Canbank MF was keen on only the products and not on anything else... In other words, we have agreed to acquire only the schemes and their assets.

Whether their shareholders have accepted the situation or not has not been among the factors that have held our attention. And such shareholders are known to include the Soros group affiliate as well.

In fact, even the people engaged by GIC MF and its other physical infrastructure are not for us to take. But the inclusion of these schemes in our product portfolio is quite another matter. Incidentally, our suite of funds is fairly quite substantial at this juncture, on both equity and debt sides, with each scheme pursuing a different asset allocation policy. Therefore, the range of options that is provided to investors is quite large. The broad plan even then is to add value to what we already offer to our clients.

Are you considering any new products?

Yes, we are coming out with an index fund, which will be our first effort at passive management. CanIndex, as the scheme has been named, will be based on the Nifty, the NSE benchmark. This has been on the cards for some time.

Canbank MF also proposes to come out with a floating rate product. This will be a normal floater, seeking to cater to investors who are becoming increasingly sensitive about more orthodox debt options. We hope to go to SEBI with the draft offer document shortly.

Incidentally, an institutional plan has been recently introduced under our liquid scheme.

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`Transfer of GIC Mutual schemes probably in October'