Fidelity's exit is a thumbs down to India and MF business
Published on Thu, Feb 02, 2012 at 13:24 | Source : Moneycontrol.com
Updated at Thu, Feb 02, 2012 at 15:24
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Fidelity's exit is a thumbs down to India and MF business
The exit plans of Fidelity poses two questions: a) Is India relevant for big fund managers? and b) is the mutual fund industry in India not an attractive enough business proposition?
Fidelity, one of the largest fund managers in the world, is looking to exit India. The exit plans of Fidelity poses two questions: a) Is India relevant for big fund managers? and b) is the mutual fund industry in India not an attractive enough business proposition?
Taking each by turn...
Fidelity manages around $310 billion of assets worldwide. The fund manager came to India in 2005, and has built up an asset base of around $1.6 billion as of end-December 2011. Of the $1.6 billion of assets under management (AUM), equity assets, at $1.1 billion, constitute around 68 percent of total assets while fixed income assets, at $0.5 billion, were around 32 percent of total assets under management. India as a percentage of Fidelity's total worldwide assets is minuscule.
India's largest fund house, HDFC Mutual Fund, manages assets of $17.6 billion, 10 times the size of Fidelity. Fidelity in India is a minor player as compared to Fidelity worldwide, which is a major player. Why is Fidelity not confident of growing its business in India to become a more relevant player?
