SBIMF to offer PMS by year end

The SBI Mutual Fund (MF) will be launching its portfolio management scheme (PMS) by December this year and has received the necessary approvals from the regulators.

The proposed PMS will start subscriptions as low as Rs five lakh per account. Given the size and reach of the SBI network, the SBIMF's proposed PMS will mean a spurt of activity in the privately managed fund segment.

A PMS creates and manages a unique portfolio of securities depending on the risk-reward profile of each individual client.

Thus for a small management fee, investors get the benefit of a uniquely-tailored professional advice. The SBIMF's PMS will be targetted at corporates and individuals alike. The fund house has already hired a new fund manager for this.

A senior SBI MF official told Business Standard: "We were looking to hire somebody who has had exposure to PMS and hence we have taken on Mehul Parekh as fund manager for this."

The PMS is slated to have three schemes initially, of which two are discretionary - aggressive and moderate, while one is non-discretionary.

SBIMF officials said that in keeping with the retail philosophy of the fund house, a smaller ticket size of Rs 5 lakh is being mooted. The fund house has set itself a target of mobilising Rs 100 crore in assets in the first full year of operation.

P G R Prasad, managing director, SBI MF, told Business Standard, "We are looking to grow and see PMS as an important part of the bouquet of services to be offered to an investor. The thrust is to expand our retail base. We aim to touch the Rs 10,000 crore mark of assets under management and aim to at least double the existing investments in equities."

SBIMF officials said that the mutual fund has about Rs 6,200 crore of assets under management (AUM), with about Rs 5,000 crore invested in debt and the balance in equities.

Prasad added, "We are open to mergers and acquisitions for growth and we will look at takeovers if a suitable candidate turns up."

N R Ramakrishnan, chief marketing officer, SBIMF, said, "The aim is to expand our retail base and offer all products under one roof. That is why PMS features on our list of priorities."

SBIMF has more than 8.2 lakh investors. He added that SBI MF is also looking to open offices in Dubai and Kuwait. Ramakrishnan said that SBIMF has 41 investor services centres all over the country and is planning to add another 8 by the end of this fiscal.

SBIMF is also looking at expanding its network of liaisoning officers, adding at least another 2,000 certified financial planners by the fiscal year-end and using the existing SBI network to tap the market for business.