Union Mutual Fund is on a growth path now and is looking at adding at least 50 per cent more to the AUM this fiscal, sniffing at Rs 15,000 crore by March.
Despite having 22 funds (21 open-ended and one close-ended funds), the fund house sponsored by Union Bank of India and Japanese major Daiichi Life could not reach anywhere in the 43-player scattered industry that controls more than Rs 43 lakh crore of public money in its over 11 years of operations.
In the year to March 2023, it had an AUM of just more than Rs 9 crore across 4.96 lakh live folios from 21 cities. Daiichi picked a 39.64 per cent stake in the MF in May 2018.
But in terms of its presence in small towns, Union MF does reasonably well with 32 per cent of the AUM coming in from the B30 (beyond top 30) cities and the rest from the T30 (top 30) cities.
“As of June our AUM stood at Rs 10,700 crore, up from Rs 9,853 crore in March 2023. We hope to take the AUM to around Rs 15,000 crore by next March as we plan to launch a large thematic fund next month from which we hope to collect at least Rs 500 crore during the NFO period. Of course, a lot will depend on the market,” chief executive G Pradeepkumar told PTI.
Pradeepkumar has been with the fund house from day 1 and was, in fact, the first employee, and had earlier worked with UTI for long, when the public sector fund house faced the Unit 64 crisis leading to the bailout of the scheme in the late 1990s.
Admitting that they could not grow in all these years, Pradeepkumar said the poor performance was primarily due to its first foreign partner KBC of Belgium which was against any third-party sales channels, limiting sales only to the Union Bank branches.
But that is past. Since May 2018 when Daiichi Life picked up a 39.64 per cent stake and now we have many banks as distribution partners. As a result, only 20 per cent of sales come from Union Bank branches now, Pradeepkumar said, adding the fund house has over 7,000 distributors and around 15,000 who are empanelled with us today.
“In fact, we’ve more than doubled our AUM since Daiichi entered as the AUM was only Rs 4,500 crore in March 2018 which rose to Rs 9,853 crore in March 2023. And we are confident of further building on from this momentum, he added.