The Hindu Business Line : UTI Mutual to focus on urban market keenly

"We have not grown at the same pace as the industry as our corpus is largely retail investor driven. We do not focus on institutional money that comes in for short periods of time."

Mumbai , Oct. 14

WHILE most of the mutual fund players are seeking ways to expand their market into non-metros and smaller towns, the country's largest fund house faces the opposite challenge.

In order to tap into big-ticket urban investors, UTI Mutual Fund is tying up with various private banks that have strong urban focus. "Several large distribution tie ups would be announced shortly, some as early as next week. In the private bank distribution network for mutual funds, our current tie-up is only with UTI Bank," said Mr Ashutosh Bishnoi, Chief Marketing Officer, UTI Asset Management Company.

"Our strengths inherently are in dealing with the agent network. What we are trying to do now is to also enable our teams to forge relationships with third party distributors, relationship managers of retail banks etc.," Mr. Bishnoi said.

UTI MF's asset base has grown by Rs 3,766 crore in the last year. The AMC's assets under management stand at Rs 20,224 crore as of September 2004. This 22-per cent growth in assets is well under the 26-per cent growth recorded by the industry.

The slow pace of growth is further manifested by the fact that UTI Mutual Fund acquired the funds of IL&FS AMC and added Rs 1,800 crore to its corpus in July this year.

In organic terms, the company has registered only about 12 per cent growth in assets.

"We have not grown at the same pace as the industry as our corpus is largely retail investor driven. We do not focus on institutional money that comes in for short periods of time. However, the fact remains that we need to be in the consideration set of investors in urban areas and we are now focussing on this," said Mr Bishnoi.

Some of the products waiting to be launched also reflect this strategy. The fund house has filed an offer document for launching an index fund based on an international benchmark, the Dow Jones Global Titans 50.

If the Securities and Exchange Board of India approves this product, it would mean that investors could place money in a fund that would invest in global companies. The index currently composes of companies such as Citibank, Toyota, JP Morgan Chase, IBM, Microsoft etc.

Internal processes at UTI MF are also going through a makeover in order to best implement its new "urban" face. Recruitment processes, perception of the company as an employer in business schools and among peers, employee training and development, have all gone through a metamorphosis, according to Mr Bishnoi. "The mindset about UTI is evolving - internally and externally," he added.