Business Daily from THE HINDU group of publications
Friday, Jan 12, 2007
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Business Daily from THE HINDU group of publications Friday, Jan 12, 2007 ePaper |
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Markets
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Asset Management Companies Nilanjan Dey
Scheme of things Peerless proposes to go about the new business on its own The asset management outfit, which will be headquartered in Kolkata, may position its fund management team in Mumbai.
Kolkata , Jan 11 Peerless General Finance & Investment Co (PGIF) has received the SEBI's permission to start an asset management venture. The company, which has so far specialised in raising deposits, intends to launch its mutual funds business in a few months. The regulator's consent was received yesterday. Peerless proposes to go about the new business on its own, and not with the assistance of a partner. The asset management outfit, which will be headquartered in Kolkata, may position its fund management team in Mumbai. Mr Jayanta Roy, Director (Corporate Planning & Strategy), said: "Mutual funds will clearly be a major business for us. We hope to tap existing customers. They will serve as a natural client base." Peerless initially expects to roll out a few basic products, including a diversified equity fund that will be launched, and subsequently positioned, with the intention that retail investors will take to it through systematic investment plans. Retail will form a key component of the mutual fund's growth plans, Mr Roy said, adding that PGIF has traditionally leveraged individual retail investors for its deposits business. Peerless, which recently stepped into its 75th year, recorded collection of Rs 1,121 crore in 2005-06, with new business bringing in Rs 815 crore. The company reported an average yield on investments of 8.48 per cent. Its net owned funds stood at Rs 534 crore - a major change from the negative net worth situation it faced a few years ago. Peerless joins a long line of aspirants that have recently evinced an interest in asset management. These include a few Indian names, some of which are said to be keen on tying up with overseas institutions. A number of foreign fund houses are also known to be waiting to flag off their operations in India. These are expected to add to the 30-odd players that make up the country's funds industry. The key is to change the conventional mindset of PGIF's depositors, Mr Roy said, referring to the typical retail investor's preference for fixed income savings products. "We will have to see how such savers can be introduced to mutual funds. The performance of the latter will be market-linked and not guaranteed. The market will need to appreciate this."
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