Despite a gloomy investment scenario, fund managers ended fiscal 2000-01 on a sweet note. The asset managers of 12 private sector mutual fund houses with 102 schemes in their kitty earned Rs 180.2 crore as investment management fees, a whopping 61.1 per cent rise over the Rs 111.9 crore clocked in the previous fiscal.
This increase in management fees was despite a 22 per cent drop in total income and a revenue deficit of Rs 500 crore from a revenue surplus of Rs 2,270 crore for the 12 fund houses. This has seen the share of management fees to total income jump to 7.9 per cent from 3.82 per cent in the previous fiscal.
Thus, though the fund managers had their share of pie, they failed to book profit to restrain the drop in losses in investment for investors.
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Investment management fees is charges based on scheme's daily average net assets for a fiscal on an annual rate levied as per announcement made in the offer document of fund houses.
Four mutual fund houses (Birla Sunlife Mutual Fund, Pioneer ITI Mutual Fund, Prudential ICICI Mutual Fund and Kotak Mahindra Mutual Fund) has, however, cumulated management fees with other expenses including trustee fees, operating expenses. Hence cumulative management fees for 12 fund houses is derived after a assumption that management fees account for 45 per cent to other expenses for these four fund houses. This is based on the observation that other fund houses management fees accounted for 45 to 49 per cent of their other expenses. Avoiding undue skewness on upper side, the lower range has been considered during the assumption.
Sun F&C Mutual Fund had the largest increase in management fees. Its fees surged 259 per cent to Rs 6.47 crore from Rs 1.80 crore. A significant growth in Money Value Bond Fund's fees triggered the growth in fees. While on the other hand, its revenue surplus plunged to Rs 4.59 crore from Rs 21.92 crore.
Templeton Mutual fund six scheme's combine management fees more then doubled to Rs 19.5 crore against Rs 8.0 crore in the previous year. Templeton Mutual Fund's monthly income plan management fees shot up seven times during the fiscal. Excluding Templeton Growth Fund that had just saw a 10 per cent increase, all other schemes management fees saw more than 100 per cent growth.
DSP Merrill Lynch Mutual Fund was the sole exception among the 12 fund houses. The fund house's management fees of six schemes dipped 19 per cent to Rs 11.46 crore from Rs 14.31 crore in the previous fiscal. A drop in management fees for the bond and balanced fund saw the fund managers with lesser management fees to its previous fiscal. However, losses in sale of investment to Rs 35.4 crore squeezed its revenue surplus to Rs 74.3 crore from Rs 165.7 crore.
Alliance Capital Mutual Fund managers management fees receivable to Rs 36.91 crore was the biggest among the 12 fund houses. However, the increase in expenses by 480 per cent had slashed the revenue surplus substantially. The fund's 10 schemes' combine revenue surplus dipped to Rs 28.3 crore from Rs 304.9 crore.