SUNDARAM BNP Paribas Fund Services has started registrar and transfer agency operations, and would invest 60 crore in the first phase over the next three years, with majority of investments going into the technology platform.
The firm, which is a 51:49 joint venture between Chennai-based Sundaram Finance and BNP Paribas Securities Services, a 100% subsidiary of Paris-based bank BNP Paribas, aims to have a market share of 8-10% of the total assets available for servicing in the span of five years.
Sundaram Finance managing director TT Srinivasaraghavan said: "In the first year of operations, this venture would have 20,000 crore of assets under servicing. In the next three years, it would touch 80,000 crore."
Currently, the fund services business is dominated by Karvy Computer Share and Computer Age Management Services (CAMS). They both service 95% of the mutual fund industry between them.
"At present, two players dominate the fund services business. Given the Indian growth story and the growing interest in mutual funds, this is the appropriate time for us to venture into this business," he said. "The retail-oriented customer service, the trust we have built, and the culture that our joint venture partners also share would be the key plus points in the fund management business."
When asked whether this service would be made available for corporates, he said: "The services would be extended to corporates. But our current focus would be on the mutual fund industry."
Sundaram BNP Paribas Fund Services will start servicing Sundaram Mutual Fund, which has around 1.4 million customers and later expand full-fledged services to the mutual fund industry and provide specific solutions to asset managers.
The company is also looking at doubling its workforce at its centres in Chennai and Madurai in the next 12 months. Currently, the company has around 150 employees working out of these two facilities.
Patrick Colle, CEO of BNP Paribas Securities Services, said: "We are looking at servicing the domestic industry and then we would cater to our global clients in Europe, UK and France as we move ahead." He also noted that it was quite interesting to know that only two players are offering fund-management services to cater to the domestic mutual fund industry.
"There is tremendous growth potential in the market and we want to target this significant growth," he said.
