The aggregate net profit for the mutual fund industry for FY13 grew nearly 6% over the previous year even as nearly half the number of fund houses in the MF universe posted losses.
Aggregate net profit for all fund houses (excluding Franklin Templeton MF and PPFAS MF) for FY13 grew 5.7% over the year-ago fiscal, data collated from Outlook Asia Capital show. However, the industry clocked a robust 22% growth in assets under management (AUM) — to R8.16 lakh crore — at the end of FY13 from R6.64 lakh crore in FY12.
“Assets have grown on the fixed-income side, which tend to make lesser money than equity assets. So, profits have grown at a smaller pace than asset growth,” said Vicky Mehta, senior investment consultant, Morningstar India.
Overall, 22 fund houses posted losses, the same number as FY12. An analysis of 15 of the bottom-ranked AMCs in terms of the assets they manage shows that their consolidated net losses widened to R161 crore in FY13 from R144 crore in FY12, with 10 of these fund houses posting losses. In contrast, the top 10 fund houses (excluding Franklin Templeton MF) posted consolidated profitability growth of about 6% in FY13, with seven out of these nine fund house posting double-digit growth.
Pramerica Asset Managers posted a loss R67.1 crore in FY13, the highest net loss figure among the fund houses. It reportedly took a hit of about R48 crore from its investment in the commercial papers of Deccan Chronicle, which defaulted on its payment. ING Investment Management and BOI AXA AMC also posted sizeable net losses of R28.7 crore and R24.15 crore, respectively. ING saw its revenues decline 35% to R37 crore in FY13 from R57 crore in the previous year.
Larsen & Toubro MF and Goldman Sachs MF, both mid-sized fund houses, also posted significant losses. L&T MF’s net losses more than doubled to R58.5 crore in FY13 compared with R25.3 crore in FY12. Experts said the chief reason for this could be the acquisition of Fidelity MF in April last year as part of which L&T MF may have taken on accumulated losses of Fidelity onto its balance sheet. Goldman Sach’s net loss tripled from R8 crore in FY12 to R 29 crore in FY13.
Top fund houses continued to make healthy profits, helped by sizeable inflows into debt schemes. HDFC MF, the largest AMC