Mutual Funds
Foreign mutual funds exit: Now Goldman Sachs & Nomura to quit India

Goldman Sachs has sold its mutual fund business to Reliance Capital. Nomura too, is said to exit its joint venture with LIC. Foreign players are again calling it quits


Reliance Capital Asset Management (RCAM) will take over Goldman Sachs' mutual fund business in India for Rs243 crore. RCAM will acquire all 12 mutual fund schemes of Goldman Sachs Asset Management India. Goldman Sachs, which does not have a strong retail focus, had surprisingly decided to enter the Indian mutual fund industry in 2011, by acquiring Benchmark Mutual Fund for Rs120 crore. The fund has a total asset under management (AUM) of Rs7,132 crore. Frustrated by poor market prospects after 2009, a number of global players like Fidelity, Daiwa, Morgan Stanley, ING, PineBridge and Deutsche have already exited the Indian mutual fund business over the past few years. According to newspaper reports, Nomura too plans to sell its 35% stake in LIC Nomura Mutual Fund. Nomura had entered India just four years ago.
In 2012, Fidelity’s business was taken over by L&T Finance, while last year Morgan Stanley was bought by HDFC Mutual Fund. Other smaller foreign players too, called it quits in the recent past, finding it increasingly difficult to stay afloat in the highly concentrated Indian mutual fund industry. While there are more than 40 fund houses in the country with total AUM of over Rs13 lakh crore, the bulk of the assets are skewed towards the big players. Naturally, the profits too are skewed towards the top AMCs. The large asset management companies making super profits and the smaller players struggle to survive. There were 21 mutual funds which made a profit totalling about Rs1,500 crore, while 20 mutual funds made a total loss of about Rs300 crore. The top seven fund houses reported a double-digit growth.
The top three fund houses account for 42% of the total equity AUM of the 40 mutual fund houses. The top 10 fund houses account for nearly 83% of the total assets. The top 10 fund houses have equity assets of over Rs10,000 crore. In comparison, Goldman Sachs has an equity AUM of just Rs107 crore.
This continuous string of exits reflects that sorry state of India’s mutual fund industry. Over the past year the Securities and Exchange Board of India (SEBI) came out with a slew of reforms in order to drive more retail participation. However, only the large fund houses seemed to have benefited.
While mutual fund inflows over the past year may have increased only the big players with a strong distributorship seemed to have gained the maximum inflows. The top fund houses have the strong distribution network of large banks or financial institutions, giving them reach and are able to drive more inflows. 
The data clearly shows that that for banks, a high concentration of in-house mutual fund sales is to their asset management companies (AMCs). Based on the distributor commissions of FY2014-15, more than 1/3rd of the commission pay-outs to banks are sourced from its in-house AMC. HDFC MF and ICICI MF, contributed to 35% and 68% of their bank’s mutual fund commissions. HDFC Bank and Axis Bank drew the highest MF commissions. Canara Bank, State Bank of India and Union Bank of India earn over 90% of their commissions from their in-house AMCs.
Large fund houses could afford to pay high upfront commissions and advance trail commissions to distributors. It is only now that commissions caps have been put in place. As the large fund houses grow bigger and bigger, we may see many more exits in the future.



Suketu Shah

12 months ago

Mutual funds is turning out to be a real big joke in India.Hardly 5% or less bt the sensex.Its to keep the agents and intermediaries employed more than anything and under the guise of "self-certified expert fund managers" ,fool the end customer and ensure he cant quite for long.

Mahesh S Bhatt

1 year ago

Cannot Understand whether Anil Amabani is better manipulator or Goldman Sach's.

Here it appears its match fixing Global level??

Sucheta some backend Ambani/Goldman debt/loan adjustments details??Dig Dig more.

Stanford's MBA Rajat Gupta is enjoying USA taxpayers $ paid free breakfasts/lunch dinners after being crucified for $21trillion USA meltdown with our Srilankan friend Ratnaraman.

They are symbolic Financial Social US Justice Departments scalps for Wall Street Wolves.

Well Big 5 got support from Government & got absolved.

Mahesh Bhatt


1 year ago

It will not be long before even Indian AMC's shut shop if the ridiculous plans of AMFI & SEBI are implemented. Eating into revenues of IFA's & illegally collecting service tax are just few of the thoughtless ideas. The latest now being "selling" funds through e-commerce sites. Stop upfront and now even trail commission, why should anyone bother advising investments in Mutual Funds. Guess pockets of SEBI officials have been filled by e-commerce sites, so the rest does not matter.

Sanjeev Binaykia

1 year ago

I agree with Meenal above. The total AUM is 13 lakh crore, not 133 lakh crore as reported above (see

The top 5 funds have about 3 lakh crore, about 25% of the AUM. This seems to be healthy enough in terms of competition, it is certainly not an oligopoly.

When then should we worry about companies entering and exiting the business. In fact this is a sign of a healthy industry where companies can make business decisions to enter and exit quickly.

As for foreign vs local, Franklin Templeton is doing well as one of the top 6. If other foreign companies find the Indian market too competitive or difficult for them, why should it be a problem? Customers are getting the benefits of a competitive marketplace.

This article seems just so meaningless.


1 year ago

With "retrospective" Pranab lolling in the Rashtra Potty Bhavan, and India's totalitarian, "Animal Farm" Constitution fully exposed, with every ugly, grotesque iniquitous law ever passed still in the statute books, you really cannot keep pretending that India is not the last surviving Soviet Franchise in the World.

Meenal Mamdani

1 year ago

Can someone please explain to me why India should be concerned that foreign companies are not operating mutual funds in India?

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Fogging ineffective in dengue control: CSE

The drive however had a harmful health impact, especially on children, elderly and those with respiratory ailments, CSE said


 With over 12,500 reported cases of dengue in the national capital, the Centre for Science and Environment (CSE) on Tuesday claimed that the fogging drive being carried out was "ineffective" against mosquitoes which are responsible for menace.
The drive however had a harmful health impact, especially on children, elderly and those with respiratory ailments, it said.
After a large number of dengue cases recorded in August, the authorities had stepped up fogging as one of the solutions to prevent vector-borne disease from spreading, the CSE said in a statement. 
"We looked into the issue when community members approached us and shared their observations and experiences. We found that fogging is ineffective in containing dengue and has a harmful effect on the health of people," said its deputy director general Chandra Bhushan.
Fogging knocks down adult mosquito only, and not the larvae that are the source of breeding, he said, adding that larvicide measures on the other hand were recognised as an important intervention to prevent large-scale spread of dengue. 
"Unless repeated frequently, fogging cannot control the next batch of adults out of the larvae. This is why, source control through larvicide measures is considered effective," the CSE said.
It estimated that the municipal corporations of south and east Delhi had already spent about Rs.70 lakh on diesel for fogging till October 10. 
The CSE said medical experts suggest that direct inhalation of diesel fumes, combined with insecticides, can exacerbate asthma or bronchitis among those with respiratory ailments, and said that instead of fogging, the focus should be on long-term preventive measures and creating awareness among people.
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.


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