Mumbai: India’s Baroda Pioneer Asset Management hopes to double assets under management to Rs60,000 crore ($1.2 billion) in 12 months as it strengthens distribution and attracts more debt fund clients, a top executive said.
The firm, in which Pioneer Global Investments, the fund arm of Italian bank UniCredit, has a 51% stake with remainder held by state-run Bank of Baroda also plans to double presence to 12 cities and relaunch its funds.
The money manager will also use about 3,000 branches of its joint venture partner to reach out to clients in largely untapped Tier II and Tier III cities, chief executive Rajan Krishnan said.
Smaller Indian cities are considered key to the future growth of India’s Rs5.9 trillion funds industry that gets about three quarters of its assets from top-8 cities now.
“There is so much of a market outside the top-10 cities,” Krishnan told Reuters in an interview on Wednesday.
“We manage over 3,000 crores. We definitely want to double our assets from here onwards in the next 12 months,” Krishnan, whose firm relaunched India operations in 2008 after a more than 5-year gap, said. Pioneer operated in India as Kothari Pioneer Mutual Fund and later Pioneer ITI Mutual Fund till mid-2002 before being bought over by Franklin Templeton Asset Management.
The venture, Pioneer’s only onshore fund management operation in Asia, received regulatory nod last year and has seen rapid growth in assets since then -- average assets have jumped more than 26 times in 12 months from a low base of Rs70 crore.
The growth was almost entirely led by fixed income funds, a trend Krishnan sees continuing as inflows into equity assets remained subdued given a sharp drop in share prices.
“The AUM will be driven by fixed income,” the Mumbai-based executive who joined the firm last year from the Indian mutual fund unit of US firm Principal Financial Group, said.
“We will look to reposition our gilt and income funds, which are almost negligible in terms of size,” he added.
The firm, which beefed up its fixed income desk by hiring former HSBC debt fund manager, Alok Sahoo, as its head in January, offers three fixed income funds.
Krishnan said two more debt funds were awaiting regulatory approval and could be launched in the next 12 months. The firm also plans to offer a large-cap stock fund if sentiments for equity investing improved.
Globally-invested funds, given the global fund management capability of Pioneer, were also on the cards but a launch is not an immediate priority, he said.