In less than one-and-a half year of entering the asset management business, engineering and construction giant Larsen & Toubro (L&T) is feeling the heat of cut-throat competition in the domestic mutual fund (MF) industry.
L&T MF, a unit of L&T Finance, has witnessed several senior-level exits in the past few months, as pressure mounts to collect assets in an industry with over 40 players.
The latest to move out is Chief Marketing Officer Mohit Sachdev, who has joined as Chief Executive Officer (CEO) of SREI Asset Management Company (AMC).
In October last year, Anish Shah, vice-president, finance and operations, had quit to join Deutsche Bank. Earlier, Deepak Mehta, national head, retail sales, put in his papers to join UTI AMC. In November 2010, Jude Abraham, who handled institutional sales for western and southern regions, joined Taurus MF as national head of institutional sales. Rajesh Singh, also a part of the institutional sales team, left L&T MF around the same time.
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Bajrang Bafna and Dinesh Ahuja, who were managing equity and debt schemes, respectively, are also among those who have moved out of the AMC in the past few months.
An e-mail query sent to L&T MF CEO Sanjay Sinha on the issue of recent senior-level exits remained unanswered.
“The senior-level exits from L&T MF in the last few months could have been because of stiff sales targets and better job opportunities,” said the CEO of a rival fund house on condition of anonymity.
L&T Finance forayed into the MF business in September 2009 after acquiring DBS Cholamandalam AMC for Rs 45 crore. The company had assets worth Rs 2,893 crore at the end of August 2009. DBS Cholamandalam AMC was later rechristened as L&T MF.
Back then, L&T Finance had retained the CEO of DBS Cholamandalam AMC, Sinha, and his entire team of 80 members.
For the quarter ending December 2010, L&T MF’s average assets under management (AUM) stood at Rs 3,192.77 crore, up about 10 per cent since August 2009.
However, L&T MF’s average AUM have fallen close to 38 per cent since May 2010 (when it had average AUM of Rs 5,170.69 crore), according to the Association of Mutual Funds in India data.
During the period, the fund industry’s average AUM declined about 16 per cent to Rs 6,74,400.42 crore.
