LIC Nomura eyes Rs 200 cr from new capital protection fund
Mumbai: LIC Nomura Mutual Fund plans to launch a capital protection fund shortly, from which it aims to mop up around Rs 200 crore from investors, a top company official said.
"We plan to launch a capital protection oriented fund soon. From this NFO, we aim to raise at least Rs 200 crore," chief executive Nilesh Sathe said.
He also said given the market environment with uncertainty of future direction, investors are likely to show interest in this kind of scheme.
As per the fund house, while 85 percent of the corpus will be invested in debt, rest 15 percent will be invested in equities.
On the direction of market, Sathe said it will depend on the global liquidity situation and FII flows.
Talking about the recent market rally and possible redemption pressure, Sathe said the industry may see some exits by retail investors, which can create redemption pressure.
Late last month, the company had told PTI that it was keen to acquire a smaller player in its bid to emerge as a major player in the mutual fund industry.
"We are not averse to mergers and acquisition. If we get a right fit at right valuation, we will be definitely looking at it. This can give us a quantum jump in our AUM with addition of new investors," Sathe had said.
Domestic MF industry currently has 46 players and some analysts are of the opinion that consolidation should happen for higher growth in the wake of losses incurred by them and falling margin.
Last fiscal, only 20 funds houses showed profits with margins for the industry falling to 15 basis points (0.15 percent) during this period against 21 bps a year earlier.
LIC Nomura Mutual Fund is a tie-up between insurance major LIC and Japan-based Nomura, with LIC holding 65 percent stake in the joint venture.