News: Fidelity exits Indian Mutual Fund business, L&T Finance is a new owner

Accumulating losses, higher costs and gloomy business outlook resulted in the exit of Fidelity …
·        Consider at fund of fund, Fidelity which manages over $200 billion internationally, sold its Indian Mutual Fund business to L&T Finance
·        Higher cost structure resulting in losses coupled with gloomy business outlook for overall industry triggered the exit of Fidelity from India
·        Fidelity has about Rs. 8,800 crore worth of assets under its management out of which equity accounts for Rs. 6,000 crore
·        L&T finance bought the business at about Rs. 500 - Rs 550 crore. Post acquisition of Fidelity, L&T Finance would become 13th largest MF player in India
·        Since the imposition of new regulatory framework on entry load structure, Indian Mutual Fund industry is  witnessing difficult time
·        Most of the individual MF distributors have either stopped selling MF products or reduced their efforts resulting into huge decline of new fund inflows for the industry
·        Lack of level playing field compare to insurance policies such as ULIP is considered as main culprit
·        If corrective action is not taken, industry fears many more such exits in near future

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