The three largest firms are ICICI Prudential Asset Management, HDFC Asset Management (with Standard Life Investments) and Reliance Nippon Life Asset Management. They collectively manage around $114.6bn in assets, accounting for around 37% of India’s $303.7bn mutual fund industry.
“The predominantly domestic joint venture is by far the most profitable structure as it offers the best of both worlds for the Indian market,” Ivan Han, a senior analyst at Cerulli, said in a separate report.
He added that a local partner can provide easy access to a robust sales network, which can lower operating and distribution costs.
“A strong local partner is important in building up AUM in India.”
The other joint venture firms are Birla Sun Life Asset Management, SBI Funds Management, UTI Asset Management, DSP Blackrock Investment Managers and Axis Asset Management.
Only one of the top 10 firms is a wholly-owned foreign firm, which is Franklin Templeton Asset Management (India), with around $14.1bn in assets.
All eight JVs and Franklin Templeton collectively manage $230.5bn in assets, or around 75% of the industry.
The only local firm in the top ten is Kotak Mahindra Asset Management, which manages around $15.7bn in assets.
The report noted that India’s fund industry is undergoing key changes, such as the ongoing regulatory consultation on having different licences for advice- and distribution-based models. There is also a drive toward leveraging digital channels, with several digital modes of investing made available to investors, including e-wallets and robo-advisors.
“Technological advances and regulatory changes will force independent financial advisors to upgrade themselves, but their reach cannot be ignored in tapping a wider geography,” Leena Dagade, associate director at Cerulli, said in the report.
