Sbi Mutual, Foreign Investors In Talks For Amc Stake

SBI Mutual Fund is holding talks with several foreign companies and institutions for equity participation in its asset management company (AMC). This will allow SBI Mutual Fund access to foreign funds, and it will be able to avail the technical expertise of foreign institutions for launching innovative mutual fund schemes.

SBI Mutual fund has already had three rounds of discussions with the Asian Development Bank (ADB) for the proposed equity participation.

However, the name of the foreign firm or institution which would finally become SBI Mutual Funds' foreign partner is yet to be decided.

Speaking to the press, SBI Mutual Funds managing director, M P Radhakrishnan, said that several Canadian and Australian firms were also in the reckoning. He said that SBI Mutual Funds was willing to consider allowing equity participation up to 25 per cent in its AMC to a foreign partner.

 

He said that the idea behind taking on a foreign partner was to have greater and easier access to foreign funds.

For instance, he said, the possibility of accessing foreign pension funds was an area SBI Mutual Funds was considering very seriously.

For this purpose, the name and expertise offered by, say Asian Development Bank, would be extremely beneficial, Radhakrishnan added.

He also pointed that derivatives trading in the country may not be very far away with the Securities and Exchange Board of India having set up the L C Gupta committee to examine the possibility of introducing such trading domestically.

Such an eventuality could open up the possibility of a host of innovative schemes for which SBI Mutual Funds lack the necessary technical expertise, he said, adding that a foreign partner could be of tremendous help in this area.

The managing director pointed out that with the strengths of SBI Mutual Funds, it should not have any problem with respect to finding a foreign partner.

He said that the company had the advantage of the brand name of State Bank, and the parent company's strong branch network as well as skilled manpower and superior technical expertise.