N Sundaresha Subramanian / Mumbai Jul 07, 2011, 00:52 IST
Corpus dips 80 per cent from the peak level to Rs 9,338 crore, the lowest since April 2007.
Only 18 months ago, it was the sixth largest fund house, with a corpus of Rs 51,501 crore. Today, LIC Nomura Mutual Fund has lost 80 per cent of this sum and fallen to 16th rank on the list of fund houses, according to the latest figures of the Association of Mutual Funds in India.
Even as MFs begin to see inflows into both debt and equity funds, LIC Nomura continues to lose assets. It lost Rs 2,000 crore in assets this quarter, too, falling below Rs 10,000 crore for the first time since April 2007. In the past year, it lost Rs 20,000 crore, or two-thirds of its asset base.
SHRINKING CORPUS
(Rs crore)
Fund house
December
2009
AUM
rank
June
2011
AUM
rank
change
Reliance
1,19, 981
1
1,01,259
1
-15%
HDFC
97,183
2
92,032
2
-5.30%
ICICI Prudential
82,432
3
79,758
3
-3.24%
UTI
78,203
4
69,105
4
-11.60%
Birla Sun Life
68,066
5
67,475
5
-0.86%
LIC MF
51,501
6
9,338
16
-82%
Source: Amfi
N Mohanraj, CEO of LIC MF, declined comment. An email questionnaire to him and Rabir Dutt, chief marketing officer, was unanswered. Mohanraj replaced Sushobhan Sarkar last year, after the company booked losses. A number of new faces have come in, some fresh from business school training. Nomura, which took 35 per cent stake in the fund house last year, has also inducted some senior people in the equities side. Ei-Ichi Oka is now chief investment officer, equity. However, the induction of a new investment team and international expertise from Nomura is yet to bear fruit. “A new team has come in and people are just settling in. It will be some time before things begin to move,” said an official from the fund house.
PEERS FAR BETTER
Dhirendra Kumar, CEO, Value Research, a Delhi-based MF tracker, says the fund house is in a drip mode. “LIC MF had a lot of assets in liquid funds. A couple of directives by RBI (the central bank) and Sebi (sector regulator) has led to heavy outflows of funds. That, combined with the changes in management, has caused the fall.” Liquid fund assets account for 40 per cent of the shrinking corpus.
However, while many of LIC Nomura’s competititors such as HDFC MF and ICICI Prudential MF also had seen a substantial outflow in liquid funds due to these rules, they have not seen such a huge fall in corpus. HDFC’s corpus fell from Rs 97,183 crore to Rs 92,032 crore, a fall of of around five per cent. ICICI Prudential MF saw assets drop from Rs 82 000-odd crore to Rs 79,000-odd crore.
Kumar says while most other MFs have been able to bring in money through launch of fixed maturity plans (FMPs), LIC has been largely missing in this space. While other fund houses had launched dozens of FMPs, popular products under the prevailing high interest rate regimes, LIC Nomura has just one.
The performance of equity schemes are also nothing to write home about. At least three schemes -- LIC Nomura Infrastructure, LIC Nomura India Vision and LIC Nomura Top 100 -- have Net Asset Values of less than Rs 10.
Working on performance in equity funds and chalking a clear marketing strategy are key if the fund house has to get out of the rut, say experts. “We are currently working on this year’s budgeting proposals,” said an official in the marketing department of the MF.
In a December interview to Business Standard, Thomas Mathew, managing director of LIC, had said the fund house was making marketing more vibrant and revamping the information technology set-up, procedures and fund management capabilities. He’d also said the fund house would benefit from the global expertise with Nomura.
LIC MF is going through a tough phase. The reason for fund & company downfall is Ashish Kumar FUND MANAGER who had been removed from the position, as the frauds done by him. As per ethics and morale company should have put him behind the bars, but yet in the company at significant post. Lots of money raised by him according to sources from companies in which money had been invested.
Things have remain same in LIC MF in last 5-6 years still they are capitalising on LIC Agents instead of improving their management and investment team. Their managements behave as if the LIC legacy will work here too.. Even Nomura did a big mistake going into joint venture with LIC MF. In times to come, it will be forced to exit.
Also, fund manageres behave as if they are the king.Never discuss their fund management strategies in public or brokers.
All the best LIC MF! Your future ends soon!
Posted by: c zscsfsdfg
July 12 , 2011, 14:28 IST
lic mf is bound to bounce back soon.
Posted by: hsrakhra
July 09 , 2011, 20:40 IST
Your comments are not very or lucid.Are you depressed or frustrated. One thing is certain it has made me worried too by tomorrow I would redeem my funds out of LICMf growth fund
Content Guide
Only 18 months ago, it was the sixth largest fund house, with a corpus of Rs 51,501 crore. Today, LIC Nomura Mutual Fund has lost 80 per cent of this sum and fallen to 16th rank on the list of fund houses, according to the latest figures of the Association of Mutual Funds in India.
