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Indian mutual fund industry to see more M&As: KPMG

The Indian mutual fund industry is expected to see more mergers and acquisitions even as funds face the challenge of regaining investor trust, global consultants KPMG said on Wednesday.

“Some consolidation has happened over the last few years and more transactions are expected to happen as smaller players get marginalised and global players enter India and large national players look to grow market share,” KPMG India managing director Ian Gomes said releasing the joint study of economic think-tank CREATE and KPMG.

The study, carried out on 300 mutual funds from 29 countries managing assets worth over Rs 14,06,500 crore, said mutual fund industry in India and abroad is also faced with the challenge of regaining investor trust.

“The asset management industry in India faces similar challenges around investor trust and fund performance in uncertain times,” Gomes said.

Consequently, all the basics of the business — performance, charges, services have come under scrutiny.

“There is a growing recognition that a business model which only works in a bull market cannot succeed in today's low nominal return market environment,” chief executive of CREATE, Amin Rajan said.

Most of the mutual funds are now rationalising manpower and infrastructure to a more efficient level to ensure higher productivity, KPMG said.

Some of the key issues confronting mutual funds worldwide include efficiency, cost control, risk management and regulations, it said.

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