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UTI creates cell for the wealthy

Mumbai, May 6: UTI Asset Management Company Pvt Ltd (UTI AMC) today launched Axel, a division that will provide wealth management solutions to private clients.

With a minimum investment threshold of Rs 25 lakh per investor, Axel is targeted at companies, trusts and high networth individuals, including non-resident Indians.

Axel, which will have a ‘Chinese wall’ with UTI’s mutual fund business, will initially offer discretionary portfolio management services and later extend to non-discretionary ones as well.

Discretionary services will consist of two options. The first option envisages a fixed fee of up to 2.50 per cent per annum of the net asset value (NAV) of the investor’s portfolio.

Under the second option, a management fee will be charged on fixed and variable basis. The fixed fee will be up to 1.50 per cent per annum of the NAV of the portfolio and the variable fee will be up to 10 per cent of the positive annual portfolio returns.

Initially, the services will include equities and fixed income, which will be later extended to cover real estate, commodities and forex.

The offer will now be open in over 55 cities where the company has service capabilities. This will be subsequently doubled to cover 110 cities. However, it is expected that the larger investor interest will be from larger cities.

Axel head and fund manager Ashish Ranawade said the rising disposable income of the average Indian and increasing investment opportunities, coupled with a scarcity of time with most individuals, have led to portfolio management services occupying a critical place.

Axel will classify each individual based on his risk profile and returns expected, he added. It will thus understand a client’s specific financial situation, family and business circumstances and then recommend a structured plan to meet his goals.

While the organised portfolio management services comprising banks, brokerage houses and asset management companies is put between Rs 2000 and Rs 4000 crore, Axel expects to obtain a “fair share” of this business.

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