High costs, poor distribution reach hobble foreign asset managers in India

MF business a difficult wicket for foreign players

Reliance Capital’s decision to put up its stake for sale in Reliance Nippon Mutual Fund (MF) to foreign partner Nippon Life Insurance could culminate in the formation of a sixth foreign fund house in the country. However, foreign asset management companies (AMCs) going it alone have not had it easy in India and several have had to exit or sell their businesses to Indian players in the past few years.

Market players attribute the spate of exits to the inability of these foreign players to scale up and establish a meaningful distribution footprint across the country. Many ran high-cost operations,