Morgan Stanley plans expansion

More than 12 years after it launched its asset management business in India, Morgan Stanley MF is finally getting serious about expanding its portfolio of schemes to include more equity and fixed income schemes.

Morgan Stanley Investment Management, which manages just one scheme, Morgan Stanley Growth Fund, is also looking at acquiring other such firms in India, said Narayan Ramachandran, managing director of Morgan Stanley Investment Management, who was recently appointed CEO of MSIM India.

He was, however, quick to add that Morgan had "discontinued" the talks to acquire Standard Chartered Mutual Fund in India.

Narayan, who relocated from Singapore, where he was co-head of global emerging markets equity of Morgan Stanley, said his first priority was to expand the company's distribution and investment management divisions, besides increasing the research on Indian stocks to cover the entire equity market. Currently, the research is confined to mainly large cap stocks.

"We will have at least one more scheme in our portfolio by early 2007," he said.

According to him, the next 5 to 7 years would be crucial for the asset management industry in India. "We expect the Indian asset management business to attain a size of $200 billion in next 5 to 7 years. There will be space for everyone," he said, referring to the entry of more players into the domestic asset management business.

Swiss financial services major Credit Suisse, Korea's Mirae Asset are among the 4 to 5 foreign firms that have announced plans to launch asset management business in the country in recent times.

From an asset base of $20 billion in 2001, the total AUM of the mutual fund industry has more than trebled to $60 billion in the last 4 to 5 years.

"Looking back, we may have missed the opportunity (to launch more products) in 2003. But, in the long-term sense, we don't think that we have missed the opportunity. We are not in a rush," he said.

"The Indian mutual fund industry looks good for the next decade or so. We see very solid growth prospect," Narayan said.

When it first entered India in 1994, Morgan Stanley was the first overseas player in AMC business here. The closed-ended MSGF, which announced an interim dividend of Rs 2 per unit for the fiscal ending March 31, 2007, has an AUM of Rs 2,830 crore (Rs 28.3 billion) as of September 30, 2006.

Narayan, who relocated from Singapore, where he was co-head of global emerging markets equity of Morgan Stanley, said his first priority was to expand the company's distribution and investment management divisions, besides increasing the research on Indian stocks to cover the entire equity market.

Currently, the research is confined to mainly large cap stocks.  "We will have at least one more scheme in our portfolio by early 2007," he said.

According to him, the next 5 to 7 years would be crucial for the asset management industry in India. "We expect the Indian asset management business to attain a size of $200 billion in next 5 to 7 years. There will be space for everyone," he said, referring to the entry of more players into the domestic asset management business.

Swiss financial services major Credit Suisse, Korea's Mirae Asset are among the 4 to 5 foreign firms that have announced plans to launch asset management business in the country in recent times.

From an asset base of $20 billion in 2001, the total AUM of the mutual fund industry has more than trebled to $60 billion in the last 4 to 5 years.

"Looking back, we may have missed the opportunity (to launch more products) in 2003. But, in the long-term sense, we don't think that we have missed the opportunity. We are not in a rush," he said. "The Indian mutual fund industry looks good for the next decade or so. We see very solid growth prospect," Narayan said.

When it first entered India in 1994, Morgan Stanley was the first overseas player in AMC business here. The closed-ended MSGF, which announced an interim dividend of Rs 2 per unit for the fiscal ending March 31, 2007, has an AUM of Rs 2,830 crore (Rs 28.3 billion) as of September 30, 2006.