The Hindu Business Line : Fund management: HSBC vaults into top five

WITHIN two years of starting operations, HSBC has emerged as one of the top five managers of equity funds in India. The fund, which started operations with assets of about Rs 35 crore under its equity funds at the end of December 2002, reported about Rs 1,800 crore of assets under its equity funds at the end of August 2004. Between March and August 2004, HSBC's equity funds reported the highest growth.

Consequent to the blistering growth, HSBC, which was eighth largest in terms of assets in its equity funds at the end of March 2004, is the fourth largest at the end of August 2004. During this period, it moved ahead of established names such as Reliance, Prudential ICICI, Birla Mutual and Morgan Stanley, in terms of equity assets managed. A larger proportion of equity assets make the asset management company more profitable, as it charges higher fees for managing equity funds. UTI Mutual Fund is the largest equity fund manager in the country with assets of about Rs 6,600 crore. The next largest player, Franklin Templeton, is way behind at about Rs 4,300 crore.

Private sector players are, however, growing faster. UTI Mutual Fund's equity assets have grown by 5.2 per cent during this period; but growth is largely because of the fund's acquisition of IL&FS funds. In contrast, the next two big players — Franklin Templeton and HDFC, who have grown organically, reported growth of just above 6 per cent. A number of other smaller companies are reporting even better growth in their equity assets, with HSBC and Reliance leading the pack.

In terms of size of individual funds too, HSBC has scaled up the ladder swiftly in the period since March 2004. HSBC Equity Fund is now the second largest equity fund with assets of about Rs 1399 crore at the end of August 2004. Franklin India Bluechip is the largest equity scheme in the country with assets just short of Rs 2,000 crore.

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