06-27-2008, 07:48 PM
Indian fund assets to hit $325bn by 2012
Friday, May 30, 2008 16:47 [IST]
Rita Raagas De Ramos
Strong economic growth, deeper financial markets and a varied distribution system will boost asset management growth in India.
India will continue to be one of the fastest growing asset management markets in the world and will see total assets in its fund industry grow to Rs 12.8 lakh crore ($325 billion) over the next 5 years, according to Boston-based research firm Cerulli Associates.
Indian mutual fund assets stood at Rs 5.4 lakh crore ($137.6 billion) at the end of 2007, up 67% from the year before.
âThe industry has seen an unprecedented expansion over the last three years,with year-on-year growth rates of 32%, 62%, and 68%, respectively,â Cerulli says in a report.
âThis has coincided with, and to a large extent been propelled by, the bull run of the Indian stock markets. Sensing exciting times ahead, a number of international asset managers have signalled their intentions to enter the fray.â
Cerulli expects the Indian mutual fund market to see an 18% compounded annual growth rate over the next 5 years, and while that may appear modest compared to the recent past, it is understandable given expectations of low growth in most global asset management markets.
A strong domestic stock market, growing investor awareness, and greater mutual fund penetration in India have helped boost assets under management (AUM), and this trend is expected to continue.
A reduction in asset churning, âthe bane of the Indian mutual fund industryâ, according to Cerulli, would go a long way in helping build a sustainable fund market in India.
The international asset management community is well-represented in India, and Cerulli expects this to increase as more global asset managers seek to build a business in that market. India has 33 mutual fund managers with 16 joint ventures and three wholly owned foreign asset managers.
Indian fund managers have been very aggressive over the last two years.
The largest fund manager, Reliance Capital Asset Management, has considerably outpaced the market in its asset growth. The industry AUM grew about 70% in 2007; Reliance by 119%.
âAsset gathering skills and product performance are far more important than the pedigree of the asset management company,â Cerulli says.
âForeign fund managers cannot rely solely on their international brand to make an impact in the Indian marketplace.â
Cerulli believes the total number of asset managers in India could rise to as many as 50 in the near future, with many of the new entrants coming from overseas.
Source : DNA
Friday, May 30, 2008 16:47 [IST]
Rita Raagas De Ramos
Strong economic growth, deeper financial markets and a varied distribution system will boost asset management growth in India.
India will continue to be one of the fastest growing asset management markets in the world and will see total assets in its fund industry grow to Rs 12.8 lakh crore ($325 billion) over the next 5 years, according to Boston-based research firm Cerulli Associates.
Indian mutual fund assets stood at Rs 5.4 lakh crore ($137.6 billion) at the end of 2007, up 67% from the year before.
âThe industry has seen an unprecedented expansion over the last three years,with year-on-year growth rates of 32%, 62%, and 68%, respectively,â Cerulli says in a report.
âThis has coincided with, and to a large extent been propelled by, the bull run of the Indian stock markets. Sensing exciting times ahead, a number of international asset managers have signalled their intentions to enter the fray.â
Cerulli expects the Indian mutual fund market to see an 18% compounded annual growth rate over the next 5 years, and while that may appear modest compared to the recent past, it is understandable given expectations of low growth in most global asset management markets.
A strong domestic stock market, growing investor awareness, and greater mutual fund penetration in India have helped boost assets under management (AUM), and this trend is expected to continue.
A reduction in asset churning, âthe bane of the Indian mutual fund industryâ, according to Cerulli, would go a long way in helping build a sustainable fund market in India.
The international asset management community is well-represented in India, and Cerulli expects this to increase as more global asset managers seek to build a business in that market. India has 33 mutual fund managers with 16 joint ventures and three wholly owned foreign asset managers.
Indian fund managers have been very aggressive over the last two years.
The largest fund manager, Reliance Capital Asset Management, has considerably outpaced the market in its asset growth. The industry AUM grew about 70% in 2007; Reliance by 119%.
âAsset gathering skills and product performance are far more important than the pedigree of the asset management company,â Cerulli says.
âForeign fund managers cannot rely solely on their international brand to make an impact in the Indian marketplace.â
Cerulli believes the total number of asset managers in India could rise to as many as 50 in the near future, with many of the new entrants coming from overseas.
Source : DNA