UTI MF eyes the rich with its axel

Targets a 15% market share of the over Rs 3,000 cr domestic portfolio management business

UTI Mutual Fund on Thursday has launched the 'axel' wealth management solutions for private clients.

The asset management company (AMC) is looking at tapping the fast growing portfolio management services (PMS) market. It is targetting a market share of at least 15 per cent of the over Rs 3,000 crore PMS business in India.

With a minimum investment threshold of Rs 25 lakh, axel will cater exclusively to corporates, trusts, and high net worth individuals, comprising both resident and non-resident Indians, said company officials. The AMC plans to tap new markets including the hitherto virtually untapped rural areas.

M Damodaran, chairman and managing director, UTI AMC Pvt Ltd, at the launch of the PMS service, said, "There has been significant growth in wealth creation within India in the last few years, leading to a sizable and growing demand for wealth management services. We believe that we have the width and the depth of fund management and research capabilities to cater to the needs of such discerning individuals who are looking for a more personalised wealth management service."

Ashish Ranawade, fund manager and head of axel, said, "While investment opportunities are increasing, the environment is also getting more volatile. Optimising returns on investments for an individual is getting more and more difficult. Our offering rests on a rich blend of experience and expertise in fund management to create a portfolio and deliver returns in sync with the expectations of the investor. Initially we are targetting around 100 customers by the end of the first year after which we plan to scale up our operations."

To begin with, axel is offering discretionary portfolio management services with two options. One, levies a fixed fee of 2.5 per cent, ideal for clients who want good returns on their investment but are looking at a low investment risk strategy.

While, the other, levies a lower fixed fee of 1.5 per cent and a variable fee which will be 10 per cent of positive annual returns.

If in case the clients want to exit before the contract expires, the investors will still have to pay the total fee. This option is ideal for clients expecting a high return and are looking at a high-risk investment strategy.

"After six months of successful launch of the current scheme, we plan to introduce the non-discretionary portfolio management option to the investors," he said.

Ashutosh Bishnoi, chief marketing officer, UTI AMC Pvt Ltd, said, "The cornerstone of our wealth management services rests on providing superior investment services, completely tailored to the specific needs and expectations of the clients. The objective of axel is to ensure that our client's long-term investment objectives are fulfilled and they feel comfortable and confident that they have entrusted their portfolio to a professional team."