New Delhi, Sept. 19: Prudential Financial Inc, the second-largest US-based life insurer, plans to set up a local joint-venture fund management unit in the next financial year (2004-05).
Sources said Prumerica Financial, the brand name used by Prudential in selected markets outside the United States, had initially planned to file the proposal with the Securities and Exchange Board of India (Sebi) this fiscal. However, due to sliding revenues and shrinking US-fund business, it had deferred plans by a year, he said.
“Prumerica will seek Sebi’s approval in 2004-05,” said a leading merchant banker. “Money flow in the US funds has trickled down and so there is pressure on fund managers to cut expenses charged on funds,” he explained.
“Prumerica will manage equity-based funds and seek to serve a broad range of investors, from retail clients to institutions and high net-worth individuals,” he said.
The fund management firm had earlier set up a joint-venture firm in China. “China and India are the two emerging markets the fund is eyeing in Asia,” the official said. Sources also said Prumerica plans to acquire majority equity stake in an existing mutual fund business.
In July, another US-based life insurer, Principal Financial Group’s Indian unit Principal Mutual Fund, had acquired rival Sun F&C Mutual Fund in a bid to consolidate its position in the fund industry.
The Rs-2,100-crore Indian fund industry is set to be one of Asia’s best performers this year helped by an estimated GDP growth of 7.5 per cent.