Within India, the client base for any asset manager is overwhelmingly corporate (58%) followed by retail (23%) and high net worth (17%), with Trusts at just 2%, according to industry data. There are some 33 firms in the mutual fund sector, with many more awaiting approval from SEBI. India’s most active investing region by far is the West (61% of assets), followed by the North (17%), South (11%) and East (6%).

Since 2003 growth in assets under management in mutual funds has been driven by the country’s booming equity market. By sector, mutual funds comprise some 46% debt funds, 31% equity funds, 19% money market funds, 3% balanced funds, and 1% other. There is considerable room for growth. Assets under management in India amount to just $8 per capita against $205 in Singapore, $36 in Brazil and $23 in the UK. In China, it is just $3. AUM as a percentage of household assets is below 4% in India, against 9% in Hong Kong and around 15% in the US.

Daniel Enskat, managing director and head of global consulting at Strategic Insight notes: “The current environment in India has reinforced the inherent strengths of mutual funds – liquidity, transparency, affordability and benefits of diversification – with many new product joint ventures in 2008 around emerging markets, thematic investing and back to basics asset allocation.”

The nature of India’s increasing number of foreign/local joint ventures has depended very much on who is involved and what sectors they are targeting. Comments Sundeep Dasgupta, chief executive of Bharti Axa Investment Management in India: “The golden combination is one of distribution, brand value and talent to grow the business in future,”

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