Morningstar starts India operations

Chicago-based firms spreads wings in Asia.

Morningstar Inc, an independent investment research company, said it has started its India operations as part of a plan to expand business in Asia.

The Chicago, Illinois-based company operates in more than 20 countries and has offices in Taiwan, Singapore, China, Malaysia and Hong Kong Special Administrative region. The Indian office also controls business interest in the Middle-East region.

Morningstar has hired Aditya Agarwal as managing director to run its India operation. Agarwal was one of the founders of MutualFundsIndia.com, which was later acquired by rating company ICRA.
 

NOT A COMPLETE STRANGER

* The company has hired half-a-dozen people to track key segments and is expected to ramp up manpower later

* The company already runs a data centre with 150 people in the country, which it inherited through an acquisition of Hemscott from Ipreo Holdings LLC for $51.6 million in cash

“For the first two years the focus is to create a brand and establish ourselves as an independent research organisation,'' Agarwal said.

The company has already hired half-a-dozen people to track key segments and is expected to ramp up manpower after it finalises plans to offer stock ratings and related advisory services. The company already runs a data centre with 150 people, which it inherited from acquisition of Hemscott data, media, and investor relations Web site businesses from Ipreo Holdings LLC for $51.6 million in cash.

Morningstar, founded by chairman and chief executive, Joe Mansueto in 1984 from a one-bedroom Chicago apartment with an initial investment of $80,000 has made a name in rating mutual funds, hedge funds and stocks. The firm's star rating system for mutual funds is coveted by industry. Morningstar sold share in an initial public offering on May 2005. Mansueto owns about 57 per cent of the company.

Morningstar's entry into India comes amid a global meltdown in stocks and growing risk averseness among investors towards equity. India's benchmark Sensitive index has declined more than 30 per cent in the past year.

Reflecting the bearish sentiment investors have invested less in mutual fund schemes resulting in the average assets under management (AAUM) declining for the first time in five years. The AAUM of fund houses fell by 7 per cent or Rs 36,798 crore to Rs 4.93 lakh crore in the financial year 2008-09, as against Rs 5.30 lakh crore in 2007-08, according to data from the Association of Mutual Funds in India (Amfi).

But Agarwal is unperturbed. ''In such times it is critical that investors know the quality of funds they have invested their money in.''

The mutual fund product that Morningstar is offering has also been tailored to suit the Indian requirement.