InvestorQ : Do you see more such mergers in the mutual fund segment in India in the next few years?
Lavanya Subramanian made post

Do you see more such mergers in the mutual fund segment in India in the next few years?

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Anamika Sodhani answered.
5 months ago
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This is more like a Hobson’s choice for the mutual fund segment. Over the years, many big global names like Deutsche MF, Fidelity, JP Morgan, Morgan Stanley, Goldman Sachs, Standard Chartered have exited the AMC businesses in India. This is a bancassurance story due to natural cross selling edge. Out of the top-5 mutual funds by AUM, 4 are banks. Even in the top-10 list, 6 belong to banking groups. That is quite hard to break for others.

How will the mutual fund segment evolve in India? In India, there are essentially 3 kinds of players that dominate the top-15 AMCs. Firstly, there are big banks like SBI, HDFC, ICICI, Kotak and Axis that dominate the AUM. Secondly, there are the big corporate affiliations with deep pockets that leverage their retail franchise. This includes formidable names in India like Birla, Tata and ADAG.

But it is not like there no hope if you are not a bank. For example, there are some critical niche players too. This last category includes AMCs like UTI due to its pedigree and the likes of DSP and Edelweiss which have strong sell side expertise. There are also pure investment plays in the MF segment like Mirae, Invesco and Templeton. However, AMCs that do not fall into one of these categories will eventually have to merge with a bigger name.

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