Dec. 24--MUMBAI -- HDFC Asset Management Co. Ltd has announced that it will acquire all the mutual fund (MF) schemes of Morgan Stanley Investment Management Ltd.
It has said that it will acquire just the schemes and not the fund house or its people.
With assets of just Rs.3,290 crore on 30 September, Morgan Stanley Investment Management has been a small-sized fund house for a long time in the Rs.8.08 trillion Indian mutual fund industry.
"HDFC Mutual Fund has acquired a portfolio of strong performing domestic mutual fund schemes from Morgan Stanley and this acquisition is another step towards expanding our mutual fund customer base," Milind Barve, chief executive officer, HDFC Asset Management Ltd, said in a statement.
Launched in January 1994, Morgan Stanley Investment Management was best known for being the first foreign fund house to be launched in India with the launch of Morgan Stanley Growth Fund (MSGF) -- an equity scheme. Back in those days, it was a 15-year closed-end scheme.
On account of being the first foreign fund house, there was a lot of investor frenzy; the queue of investors outside Morgan Stanley offices in 1994 when it launched MSGF were rumoured to be as long as 2km.
Many investors, however, were said to have mistaken MSGF to be an equity share and got stuck with it since it was a closed-end scheme; redemption was only possible on the stock market and only if there were buyers.
But tough market conditions and average performance of MSGF meant that investors got stuck with MSGF. The fund house got a lot of flak for it and did not launch another scheme till 2008. Subsequently, the fund house launched schemes across equity and debt categories.
Tough market conditions in the past five years and a strict regulatory environment that included removal of fees that asset management companies could pay to distributors have put a lot of stress on the Indian mutual fund industry, especially smaller fund houses.
In June, SBI Funds Management Co. Ltd acquired Daiwa Asset Management India Ltd.