Tokio Marine mulls foraying into Indian AMC space

Japanese financial major Tokio Marine Holdings, which recently entered into a life insurance joint venture agreement with Edelweiss, today said it is mulling to enter into the Indian asset management space.

“As for an Indian asset management company (AMC), there is a possibility to enter into the area in the future,” said Hiroshi Endo, managing director, Tokio Marine Holdings. Endo, however, said currently the company would like to focus on its life and non-life insurance businesses in India. It has a non-life insurance joint venture with Iffco.

Tokio Marine Holdings, the holding company of the Tokio Marine Group, is one of the leading insurers globally and recorded a revenue of $39 billion in the last financial year. Tokio Marine Asset Management Company, incorporated in 1985, has a total assets under management of ¥4.6 trillion, as of September 30, 2009.

Consolidation has started creeping in the Indian mutual fund industry, where over 35 fund houses are operating at the moment. “Many overseas fund houses are eyeing for inorganic growth in the Indian market, which is fiercely competitive,” an industry official said.

Recently, US-based money manager T Rowe Price bought 26 per cent stake in UTI Mutual Fund for $140 million. The mutual fund industry in India started in 1963 with the formation of Unit Trust of India and until 1987, only two fund houses, both public sector entities, were operating.

The government, however, allowed private sector funds in 1993, which changed the way of the industry with innovative products and better customer services. From then on, plenty of domestic and foreign fund houses started launching new funds in India. The total AUM was $118 billion as on August 2007. The total AUM of the Indian mutual fund industry stood at Rs 637,180.5 crore as on September 30, 2009.