Sanlam joined hands with SMC Global, eyeing India fund launch by Feb.

Sanlam joined hands with SMC Global

South African financial services firm Sanlam expects to start mutual fund operations in India by February next year and hopes to break-even in three to five years, a top executive said on Tuesday. 🙂


The firm, which has joined hands with Indian broking firm SMC Global for asset management and wealth management businesses,  has received an in-principal approval from the market regulator and is currently hiring a fund management team.

🙂

“Unless something goes strangely wrong, we are hoping to get operational round about Feb. 1,” said Sanjeev Gupta, chief executive of Sanlam’s emerging market investment unit.


The firm, South Africa’s second-biggest insurer, will join the likes of

Italian bank UniCredit’s arm – Pioneer Global,

South Korea’s Mirae Asset,

France’s Axa and Japan’s Shinsei

These have started operations in India’s fiercely competitive fund industry over the last two years.


The market will become even tougher for fund managers, and particularly hostile to small and new players, as a ban on entry fees charged by mutual funds — to be imposed from Aug. 1 — slows growth and raises distribution costs.

The firm is not hopeful of making money in the initial years as it spends on building brand and strengthening distribution.

“Anytime between the third and the fifth year we feel we will probably turn the tide,” Gupta said.

To start with, the firm plans to tap offshore clients to invest in India-dedicated funds and leverage 1,800 offices of its local partner SMC to attract domestic investors.


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