Post acquisition of L&T Mutual Fund, HSBC AMC will become 12th largest

Suresh P. Iyengar | Surabhi | | Updated on: Dec 25, 2021

Ravi Menon, CEO, HSBC Asset Management (India) Pvt Ltd

Combined assets stand at ₹92,400 cr

 

The acquisition of L&T Mutual Fund will catapult HSBC Asset Management Company to the 12th position from the 21st, with combined assets of over ₹92,400 crore as of November-end.

Rationalisation of schemes

Ravi Menon, CEO, HSBC Asset Management (India), told BusinessLine the entire deal requires several regulatory approvals, which will take a few months and the integration process of the acquired asset will start with rationalisation of schemes.

L&T Mutual Fund has about 29 open-ended schemes of which 17 are common with HSBC AMC and hence these funds will have to be merged, he said, adding that other schemes which are unique on both sides will continue.

“We will ensure that the rationalisation of schemes will be done with the least disruption to investors of the fund houses,” he added.

HSBC AMC has presence largely in major metros but the acquisition will deepen the penetration with L&T Mutual Fund having offices in 35 different cities, which will help support investors and over 50,000 distribution partners.

Going forward, he said, the natural extension of the deal is to leverage on L&T Mutual Fund’s presence and widen the reach beyond top 30 cities.

Investments in equity mutual fund schemes will continue to remain robust despite the market volatility and in fact the strong inflows from retail investors through mutual funds has acted as a counter force holding the markets when foreign investors booked profit, said Menon.

Fixed income may gain

Investment through systematic investment plan has hit a new high and is a reflection of investors gaining confidence in investment through mutual funds, he added. The fixed income space is somewhat muted because of low interest rate scenario, but going forward it will gain prominence with rates getting rationalised.

Investors have had a very positive experience over the last two years and those who had stayed invested despite experiencing most volatile times have been rewarded handsomely, he said.

There is also an increasing recognition in the last few years that the volatility is reflective of the high returns and going forward returns may perhaps be more muted. As long as that realisation is there, there will be less a reason for any disappointment, said Menon.

“We have seen a large number of retail investing directly into the stock markets, but with passage of time, there is a realisation that this activity takes a fair bit of time and it becomes very difficult in a volatile market. These investors now consider that they are better off investing through mutual funds,” he said.

Published on December 24, 2021
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