IDBI Bank MF unit to focus on index funds

IDBI Asset Management Ltd, the fully-owned unit of IDBI Bank that received Securities and Exchange Board of India approval to launch mutual fund operations on Thursday, will focus on index funds on the equity front.

The first fund launch is likely to be IDBI Nifty Index Fund, which the company will file with regulator on Friday. The fund house, headed by Krishnamurthy Vijayan, has not hired an equity fund manager and has Gautam Kaul to manage fixed income funds.

The bank has invested Rs 25 crore in the mutual fund unit, Yogesh Agarwal, chairman and managing director, IDBI Bank, said. “We have an established retail model to distribute mutual fund products,” Agarwal said, adding the funds would be distributed via 700 branches of the bank in the country.

“Mutual fund business augurs well with the bank’s vision of providing entire gamut of financial services to clients,” he said.
Asked why IDBI Mutual Fund has decided to go solo after having got out of the 50% joint venture with Principal Mutual Fund in March 2003, Agarwal said, “When you marry you have to make adjustments, when you are a bachelor you are free to go the way you want”.

It is also learnt that Fortis, which is IDBI Bank’s partner for its insurance venture, had offered to be a partner in the mutual fund venture as well. But the bank declined it. “If need be, we can acquire one of the companies that are willing to exit the business,” Agarwal mentioned.


Source: http://www.dnaindia.com/money/report_idbi-bank-mf-unit-to-focus-on-index-funds_1363480

IDBI plans to re-enter MF biz

New launch: Mr Yogesh Agarwal (left), Chairman and Managing Director, IDBI Bank, and Mr Krishnamurthy, MD and CEO, IDBI Asset Management Ltd, at a press conference to announce the launch ‘Bank's Mutual Fund Subsidiary' in Mumbai on Thursday

IDBI Bank is re-entering the mutual fund space, this time around with its wholly owned subsidiary IDBI Asset Management. The bank has received all the necessary regulatory approvals and the first fund is expected to be launched by mid-April, said Mr Yogesh Agarwal, Chairman and Managing Director at IDBI Bank.

The first offering will be an index fund called the Nifty Fund based on NSE's Nifty, he said.

The bank has invested Rs 25 crore in the mutual fund and has earmarked another Rs 25 crore as the fund house grows, he said.

IDBI Bank had exited its 50:50 partnership with Principle Financial Services in 2003. Explaining the rationale behind re-entering the mutual fund business, Mr Agarwal said the bank had exited the venture to concentrate on setting up its retail business. “Now with an established retail presence, we think it's the right time to enter the mutual fund space,” he said.

Right now, the team consists of 27 people and the company plans to take the number up to 200, said Mr Vijayan, who earlier headed the asset management business of JP Morgan in India.

The launch of its asset management arm is IDBI Bank's efforts to broaden its product range, said Mr Agrawal. “The bank already advises on selling mutual fund and has over 1,000 AMFI trained personnel.”


Source: http://www.thehindubusinessline.com/2010/03/26/stories/2010032653501000.htm