Reliance MF says group investments at 3.2% of AUM

In a first of its kind disclosure in Indian mutual fund space, Reliance Capital Asset Management (RCAM) today said investment of group companies in its scheme stands at Rs 3,274 crore, accounting for 3.2 per cent of the fund house's total average assets under management.

The fund houses have so far not been disclosing the exact amount of investments by their group companies in their respective schemes, but industry estimates suggest that such investments vary from as low as 3 per cent to as high as 20 per cent for different AMCs.

Reliance Mutual Fund's proactive disclosure could force other fund houses as well to make such disclosures, while experts are of the opinion that regulator Sebi and industry body AMFI (Association of Mutual Funds in India) should also initiate steps to make such disclosures mandatory.

RCAM is part of Anil Ambani-led Reliance Group's financial services arm Reliance Capital. In terms of average AUM, it is currently the second largest after HDFC Mutual Fund (Rs 1.06 lakh crore) among 44 fund houses operating in the country, who together manage assets worth over Rs 8.5 lakh crore.

However, the rankings may change if group investments are excluded from the AUM, as many large fund houses have significant chunk of investments coming from their group entities.

"As the biggest asset manager in the country, we feel it is our responsibility to take disclosures in the mutual fund industry to the next level," RCAM CEO Sundeep Sikka said.

In a statement, RCAM said it has decided to voluntarily disclose total investments made by Group companies in its total mutual fund average AUM and such disclosurers would be made every quarter now onwards.

"As of December 31, 2013, the investment of group companies stood at Rs 3,274 crore (USD 528 million) and accounted for 3.2 per cent of the total mutual fund AAUM of Rs. 1,02,487 crore (USD 16.5 billion)," the fund house said.

With this, RCAM has become the first AMC to make disclosures in public domain of total investments by group companies in its mutual funds.

Disclosing the details of total investment by group companies will help the investor get a better view of the fund house and enable greater transparency, Sikka said.

"We hope the other players in the industry will also makes this voluntary disclosure in the larger interest of the investors," he added.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Sanskrit does not compare with German in the job market

    While there can be no argument that the importance of Sanskrit as an all-India language needs to be emphasised, particularly for the young generation

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

M S Swaminathan

Public good research in agriculture

Public good research in agriculture is designed to promote risk ...

Zehra Naqvi

To hell and back

Here is a book that makes you wish there were ...

Bubbles Sabharwal

When your real & reel life heroes are the same

ALL the world’s a stage and we all are merely ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture