Inks pact with KBC Asset Management of Belgium "WE would want to be amongst top 10 mutual fund houses in the country in the next five years" MV Nair CMD, Union Bank of India
UNION Bank of India on Wednesday announced its foray into the crowded mutual fund space joining hands with KBC Asset Management of Belgium to launch Union KBC Asset Management Company.
The joint venture will see Union Bank of India hold 51 per cent stake and KBC Asset Management own 49 per cent stake in the joint venture firm. Union KBC AMC will float its first open ended equity scheme called Union KBC Equity Fund.
"We would want to be amongst top 10 mutual fund houses in the country in the next five years," said MV Nair, chairman and managing director, Union Bank of India. A total of 43 mutual fund houses are operating in the country with total assets under management in the end March standing at slightly over Rs 7,00,000 crore, as per details available on the Amfi website.
The mutual fund will look to raise Rs 600 crore by the end of 2011 for its equity fund schemes. Depending on the market condition, the fund house may also look to launch equity linked savings scheme (ELSS) and a midcap fund, but floating an offshore fund in the near-term is not in the radar, said Ashish Ranawade, chief investment officer at Union KBC Mutual Fund.
The first scheme, Union KBC Equity Fund, will primarily invest in a portfolio consisting of equity and equity related securities, the company said in a media release. "We will invest 80 per cent of the corpus in large cap stocks consisting of BSE-100 companies in order to bring stability to the product," said Ranawade.
The bank will use it extensive 3,000 branch network spread across the country and tap its three crore odd customers to sell its mutual fund schemes.
"Union Bank of India brings an extensive network and knowledge of Indian customers, while KBC brings valuable expertise gained from more than 50 years in investment management," said G Pradeepkumar, chief executive officer at Union KBC AMC.
