The Hindu Business Line : Crisil ranking of EPFO fund managers not reflected in final selection

New Delhi, July 30 The best asset management companies in terms of qualitative rankings made by Crisil to the Employees Provident Fund Organisation (EPFO) have not found their place among the selected four for managing EPFO’s funds.

A detailed study of the Crisil report, based on which the Central Board of Trustees (CBT) of the EPFO on Tuesday finalised the names of the new fund managers, throws up a number of interesting aspects.

First, the best four fund managers. Crisil ranked HDFC AMC first in terms of quality aspect with a score of 34.69 out of 40 followed by Franklin Templeton AMC (34.07), Tata AMC (33.62) and UTI AMC (33.43) in the second, third and fourth position respectively.

However, the four selected are different. They are HSBC AMC (32.92), ICICI Prudential AMC (32.70), Reliance Capital AMC (31.35) and SBI (29.71) who stood at fifth, sixth, seventh and twelfth positions respectively.

Second, according to the rankings made in the study, country’s largest financial institution Life Insurance Corporation of India (26.58) ranked 16 among the 17 AMCs in the fray.

Even more surprising is the fact in terms of operational processes and efficiency, the Crisil report ranks Kotak Mahindra AMC at the top among all the 17 companies with a score of 9 out of 10, while it did not even finally qualify even in the first round of bidding and was left out when the first 10 out of the 17 applicants were selected.

Also, the report finds LIC and SBI MF as the worst performers under this category with both scoring six.

Officials said that the quality of the fund managers did not matter much in the decision making process as it was focussed more on financial and quantitative considerations.

The trade union representatives in the CBT told Business Line that it is in their knowledge that more than one of the lost-out bidders are seeking legal opinions on how to seek redressal on the issue.

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