Handful of fundmen handle bloated asset kitty

Equity-based funds are making hay while the sun shines. As capital markets made steady progress in the last one year, equity assets of fund houses have surged around 50-150 per cent. But are the fund houses equipped fully to manage their bulging assets?

Some industry watchers feel that many of the fund houses do not have enough manpower to handle their growing assets.

A survey done by Business Standard across eight of the top ten funds (size wise) indicates that not many fund houses have increased the number of fund managers in their team.

For example, UTI Mutual Fund, the largest fund house in the country, has added 28 per cent to its equity asset in the past one year, amounting to Rs 7,855 crore. But the number of fund managers remains stagnant at four and one for the overseas operations.

Prudential ICICI Mutual Fund, which has made substantial gains in assets, has five fund managers on the equity side. The fund house has launched three new funds in the mean time, thus taking their tally to ten in the equity segment. However, the number of fund managers has remained the same at five.

HDFC Mutual Fund has a team of three fund managers handling a huge corpus of about Rs 5,000 crore in their equity based funds. They have nine funds in the equity category, including two schemes launched in the last one year-the Core and Satellite fund, and the Premium Multi Cap fund.

Kotak Mahindra Mutual Fund has stuck to its two fund mangers on the equity side who oversee nine funds in this category. They have launched two new schemes, the Kotak Contra fund and Kotak Midcap fund this year.

Rajat K Jain, chief investment officer, Principal PNB Asset Management Co, thinks that there should be a synergy between the number of fund managers and the corpus.

"At present, we have a total corpus of about Rs 1,700 crore in our 10 equity based funds. As the asset size grew in the last one year, we inducted a new fund manager, thus expanding the team to three. If the AUM increases to about Rs 5,000 crore in the future, we would definitely induct one more person."

Reliance Mutual, which has ten funds in equity segment, launched one fund last year, thus raising its asset by a whopping 80-100 per cent. But there are just three fund managers managing Rs 5,000 crore of its assets. An addition of around Rs 2,500 crore in net asset, however, has not inspired the fund house to employ more fund managers.

Birla Sun Life Mutual has two fund managers to manage its Rs 2,200 crore assets. The fund house which has launched one new scheme - the Birla Gen Next fund, expanding its equity portfolio to eight schemes.

Though the fund recorded a strong growth of Rs 500 crore, there was no increase in the number of fund managers.

HSBC Asset Management seems to be the only fund house among the top ones, to have proportional figure of fund managers to manage its assets.

The fund house features three schemes including the Midcap equity fund which was launched this year and manages assets worth around Rs 2,000 crore. But unlike its peer group, it has managed to raise the number of fund managers from one to three in the last one year.

Standard Chartered Mutual Fund which is one of the top-most fund houses in debt fund sector with a corpus of Rs 8,200 crore has inducted a fund manager to manage its newly launched Classic Equity fund, which collected Rs 1,008 crore during its initial offer period.

But not all industry players agree that it is necessary to increase the size of fund management team as and when assets grow.

According to Kavita Hurry, managing director & chief executive officer, ING Vysya Mutual Fund, "The size of the team depends on the number of schemes rather than the corpus. Unless and until there is a big change in the number of companies in this pool, there is no need to increase the size of the management team," she added.