Goldman Sachs Asset Management LP (GSAM) has revived its plan to start mutual fund operations in India, a person familiar with the matter told ET. Late last year, GSAM had deferred the launch due to uncertain market conditions.
GSAM, a subsidiary of the Goldman Sachs Group Inc, had received Sebi approval in September 2008 for starting the mutual fund. Adam Broder was brought in from as chief executive officer, and Prashant Khemka was appointed the chief investment officer. With the launch being delayed, Broder was recalled to Goldman’s Hong Kong office, while Khemka moved back to managing portfolios of private clients of Goldman.
An e-mail questionnaire sent to Goldman Sachs elicited the following response. "After we decided to postpone our local funds launch in November, we have retained our offices, our local asset management licence and importantly our Indian equity investment team in Mumbai, headed by Prashant Khemka, who continues to lead the business. We are constantly evaluating the Indian domestic mutual fund market from a distributor, macro and regulatory perspective to identify the most appropriate time for our launch. We remain very focused on expanding our asset management business in India."
ET has learnt that GSAM is planning to launch schemes that will invest in international markets, using the 'feeder fund' concept.
A 'feeder fund' is one that invests through another fund called the master fund. The local fund would buy units of a global fund managed by the international 'parent' group or fund.
For the Indian investor, this a convenient way to have an exposure to international markets. However, a major concern is the double layer of fees that may be payable since there are two sets of fund managers — one for the host fund and one for the feeder fund.
This can significantly eat into the projected returns. More often than not, such schemes find more favour with HNIs, though fund managers say there is a fair bit of interest amongst the retail too, depending on the product.
Among others, DSPBlackRock has two feeder funds, one of which is the 'World Gold fund', launched in July 2007 (by the then DSPML) which is a feeder fund that invests into BlackRock’s World Gold fund.
The funds corpus is currently Rs 1,400 crore and is said to be the largest feeder fund out of India. DSPBlackRock also recently closed its second feeder fund, the World Energy fund, which largely invests into the BlackRock World Energy Fund. It raised around Rs 360 crore. A certain percentage of the domestic fund will also invest into BlackRocks New Energy Fund.
"Feeder finds provide access to an investment theme not available locally. It also brings about an element of diversification to one's portfolio," S Nagnath, president & CIO of DSP BlackRock told ET. Mr Nagnath said they have plans to introduce more such products in the near future.
JP Morgan's Greater China Off-Shore Fund is also a feeder fund for a pre-existing fund. JPMorgan AMC, India, has indicated that it will bring in a bouquet of international funds to India through the feeder route during this year.
GSAM, a subsidiary of the Goldman Sachs Group Inc, had received Sebi approval in September 2008 for starting the mutual fund. Adam Broder was brought in from as chief executive officer, and Prashant Khemka was appointed the chief investment officer. With the launch being delayed, Broder was recalled to Goldman’s Hong Kong office, while Khemka moved back to managing portfolios of private clients of Goldman.
An e-mail questionnaire sent to Goldman Sachs elicited the following response. "After we decided to postpone our local funds launch in November, we have retained our offices, our local asset management licence and importantly our Indian equity investment team in Mumbai, headed by Prashant Khemka, who continues to lead the business. We are constantly evaluating the Indian domestic mutual fund market from a distributor, macro and regulatory perspective to identify the most appropriate time for our launch. We remain very focused on expanding our asset management business in India."
ET has learnt that GSAM is planning to launch schemes that will invest in international markets, using the 'feeder fund' concept.
A 'feeder fund' is one that invests through another fund called the master fund. The local fund would buy units of a global fund managed by the international 'parent' group or fund.
For the Indian investor, this a convenient way to have an exposure to international markets. However, a major concern is the double layer of fees that may be payable since there are two sets of fund managers — one for the host fund and one for the feeder fund.
This can significantly eat into the projected returns. More often than not, such schemes find more favour with HNIs, though fund managers say there is a fair bit of interest amongst the retail too, depending on the product.
Among others, DSPBlackRock has two feeder funds, one of which is the 'World Gold fund', launched in July 2007 (by the then DSPML) which is a feeder fund that invests into BlackRock’s World Gold fund.
The funds corpus is currently Rs 1,400 crore and is said to be the largest feeder fund out of India. DSPBlackRock also recently closed its second feeder fund, the World Energy fund, which largely invests into the BlackRock World Energy Fund. It raised around Rs 360 crore. A certain percentage of the domestic fund will also invest into BlackRocks New Energy Fund.
"Feeder finds provide access to an investment theme not available locally. It also brings about an element of diversification to one's portfolio," S Nagnath, president & CIO of DSP BlackRock told ET. Mr Nagnath said they have plans to introduce more such products in the near future.
JP Morgan's Greater China Off-Shore Fund is also a feeder fund for a pre-existing fund. JPMorgan AMC, India, has indicated that it will bring in a bouquet of international funds to India through the feeder route during this year.
Posts
No comments:
Post a Comment