Now fund managers to manage Rs 2.5 lakh cr EPF corpus

Excerpts from India Business Hour on CNBC-TV18 Watch the full show » Nifty BSE | NSE 10/02/12 Are Mutual Funds betting on Nifty?

It could be the first step towards professional management of the Employees Provident Fund (EPF). The board of trustees of the fund has selected four fund managers to manage the Rs 2.5 lakh crore corpus.

The four fund managers are ICICI Prudential, SBI, HSBC and ADAG-controlled Reliance Mutual Fund.

These fund managers were selected from 10 bidders. However, a final decision will be taken by the finance and investment sub-committee of the Central Board of Trustees (CBOT) of the EPFO.

ICICI Prudential's Nilesh Shah said the cost itself will itself help in increasing the returns to investors. He said they shall focus on professional expertise of managing money to enhance the risk adjusted returns for millions of consumers as per the mandate given by the Employees Provident Fund Organisation (EPFO).

Excerpts from CNBC-TV18's exclusive interview with Nilesh Shah:

Q: This is a big news for all of you and take us through the impact likely what are we actually going to see in terms of returns for consumers?

A: I think we are absolutely delighted to get this opportunity. We think in terms of the cost all of us have quoted, that itself will be able to increase the return to the investors. However, we shall be focusing on our professional expertise of managing money to enhance the risk adjusted returns for millions of consumers as per the mandate given by the Employees Provident Fund Organisation (EPFO).

Q: You said that you will see those returns going up, but could you put a number to that or at least give us an approximation?

A: It is really difficult to predict what kind of return we can generate. But if you see the track record of most of the mutual fund managers, including ICICI Prudential, they have outperformed benchmark indices by reasonable margins across both debt and equity. So there is no reason to believe why we can't generate the same outperformance and enhance the risk adjusted returns for our mandate.

Q: What percentage this Rs 2.5 lakh crore corpus do you expect coming your way?

A: We do not know it will all be in the discretion of CBOT and we have to yet get the official intimation from the same, but for us it's a great opportunity to service the CBOT. It's a prestigious award and we are really happy that at least a step has been taken in the right direction where there is competition among managers who will all stride their best to deliver the best risk adjusted return for CBOT.

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