Max Life Pension Fund Management (MLPFM), a subsidiary of Max Life Insurance, is eyeing assets under management (AUM) of ₹15,000 crore in the next five years, said Prashant Tripathy, Managing Director & CEO, Max Life Insurance.
“We have started our pension fund management business on a strong note. We have so far done ₹24 crore in AUM. We want to hit ₹15,000 crore in five years, and are aiming for ₹1-lakh crore in the next 10 years,” Tripathy told businessline.
Last August, MLPFM secured Commencement of Business certificate from the pension regulator Pension Fund Regulatory and Development Authority (PFRDA).
Tripathy highlighted that MLPFM has a team in place, along with a full-fledged CEO, and is set to ride on the growth opportunities in pension sector.
“We are hiring large number of people. We are going to go to institutions. We have just taken a PoP licence. We are now a full suite provider — we have fund management business, annuity service provider and now we have PoP presence,” he added.
Set up with initial capital of ₹ 50 crore, MLPFM is managing the pension assets with investment choices under the National Pension System (NPS).
Growth of NPS
Currently, there are ten PFRDA-approved pension fund managers in the country. As many as three new players — Max Life, Tata Pension Fund Management and Axis —had entered the pension fund management last year and have commenced operations. One more player, DSP Group had received conditional licence, but yet to start business.
Over the last two decades, there has been robust growth in National Pension System (NPS), which has exceeded ₹8.5 lakh crore and growing at a CAGR of 30 per cent.
To encourage wider participation, the PFRDA had also given incentives for private participants in the retirement space, giving more flexibility on fees that was low till recently.
Although India’s pension assets to GDP is still low, economy watchers expect the country’s overall retirement space to make rapid strides.
Percentage of Indian people more than 60 years was 9.9 per cent in 2020. It was 7.8 per cent in 2010 and it is expected to only increase by 300 basis points in 10 more years. There is a demographic shift and more and more people are expected to be in retired space in coming years.