Financial Daily from THE HINDU group of publications
Wednesday, Feb 19, 2003
Financial Daily from THE HINDU group of publications Wednesday, Feb 19, 2003 |
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Markets
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Asset Management Companies Sundaram AMC eyes portfolio management Sanjiv Shankaran
CHENNAI, Feb. 18 SUNDARAM Asset Management Company (SMAC) plans to offer portfolio management services (PMS) shortly. According to Mr T.P. Raman, Managing Director, SMAC, the proposed portfolio management business will be a stand-alone division of the company, clearly demarcated from its existing mutual fund business. Feedback from customers of its mutual fund business suggested a business opportunity in portfolio management, explained Mr Raman. Currently, SMAC is in the process of conducting market research on investors' needs in order to deepen its understanding of the business opportunity in portfolio management. "We are serious about it", said Mr Raman and added the new division would be established in a few months. Elaborating on the trigger for the decision to start a PMS, Mr Raman said customers' feedback indicated that objectives and composition of existing mutual fund schemes did not always match their risk orientation. Therefore, SMAC sees potential in starting a division that will tailor a portfolio to meet customers' unique needs. The PMS will be regulated by the relevant Securities and Exchange Board of India (SEBI) guidelines. Mr Raman added that SMAC would maintain a separate set of accounts for PMS. A "firewall" would segregate the proposed division from the existing business. Additionally, the advisors in the PMS would have nothing to do with the mutual business, said Mr Raman. Two other key differentiators between the existing business and the proposed PMS would be that SEBI regulations provide relatively more freedom with respect to commission chargeable in portfolio management, and advisors could suggest schemes from competing mutual funds to construct an ideal portfolio for a customer. A handful of banks have aggressively roped in customers under schemes that mimic PMS, said industry sources. Among asset management companies, Prudential ICICI (the largest private sector mutual fund) offers PMS.
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