UTI Mutual Fund to finalise MD soon

UTI Mutual Fund has formed a screening committee comprising three of its board members to zero-in on a suitable candidate to occupy the corner office.

The committee, comprising DK Mehrotra (former Chairman of Life Insurance Corporation of India), Uttara Dasgupta (former Chief General Manager of State Bank of India) and James S Riepe (former Vice-Chairman of the board of directors of T Rowe Price), has been formed following Leo Puri demitting office as Managing Director of India’s sixth-largest mutual fund on completion of his five-year term on August 13.

Imtaiyazur Rahman, Group President and CFO, has taken charge of the mutual fund as acting CEO with effect from August 14.

The MF is looking for candidates with about 30 years experience in the financial services sector, with at least 10 years in the mutual fund industry. However, the screening committee can relax the criteria for deserving candidates.

There is a sense of urgency in appointing the MD as the fund house plans to tap the capital market with an initial public offer, even as the four main stakeholders are required to pare their shareholding to 10 per cent by March 2019, in keeping with the market regulator’s cross-holding restriction in the domestic mutual fund industry.

UTI’s four sponsor stakeholders – State Bank of India, Punjab National Bank, Bank of Baroda and Life Insurance Corporation of India – have 18.24 per cent stake each in the fund house.

All four shareholders have a presence in the mutual fund business through their own subsidiaries. T Rowe Price International Ltd has a 26 per cent stake in UTI.

In the April-June 2018 quarter, UTI’s average assets under management (AAUM) accounted for 6.54 per cent of the mutual fund industry’s AAUM of Rs.23,40,377 crore.

As per the April-June 2018 quarterly AAUM, UTI Asset Management Company (UTI AMC) is the sixth-largest AMC with an AAUM of Rs.1,53,183 crore.

The top-five mutual funds by AAUM are – ICICI Prudential AMC (Rs.3,10,166 crore), HDFC AMC (Rs.3,06,841 crore), Aditya Birla Sun Life AMC (Rs.2,49,270 crore), Reliance Nippon Life AMC (Rs.2,40,445 crore) and SBI Funds Management Pvt Ltd (Rs.2,33,114 crore).