MUMBAI: Goldman Sachs Asset Management Company India has deferred its plans to set up mutual fund operations in the country because of unfavourable market conditions. According to people familiar with the development, the wholly-owned arm of the Goldman Sachs group is unlikely to launch mutual fund operations here at least in the next year or so.
This has been conveyed to the employees, who were roped in for the proposed mutual fund, and has resulted in several staff heading for the exit. Goldman Sachs officials declined to comment on the matter.
Goldman has recalled its CEO for the venture, Adam Broder, who had shifted base to Mumbai last year for the assignment. Its chief investment officer is believed to be moving back to Hong Kong to take up his previous assignment of managing portfolios of private clients.
Top officials at other mutual funds confirmed that they have received a number of enquiries for jobs from the staff of Goldman AMC recently.
The company had received the approval from Sebi to start mutual fund business in India early September 2008, when the equity markets were already in a state of turmoil. With markets showing no signs of recovery and the outlook remaining bleak at least for this year, the global financial giant joins the list of other entities, which have deferred their plans to launch mutual fund operations in India.
Other domestic financial firms such as Motilal Oswal and Matrix Financial Services are believed to be going slow with regard to the launch of their asset management businesses.
“Established mutual fund houses are finding it difficult to get business in equities nowadays. In such a scenario, it would be next to impossible for a new fund house, however renowned it is globally, to start one now,” said a CEO at a private mutual fund.
Mutual fund houses, which had launched their businesses during the peak of the equity bull run till early January 2008, have incurred heavy losses because of lack of enough revenues vis-à-vis higher costs, amid the sharp decline in markets.
While some are believed to have cut down operations to the bare minimum to just service existing clients, a handful are believed to be on the block, but have not found enough buyers due to adverse market conditions.
“Established mutual fund houses are finding it difficult to get business in equities nowadays. In such a scenario, it would be next to impossible for a new fund house, however renowned it is globally, to start one now,” said a CEO at a private mutual fund.
Mutual fund houses, which had launched their businesses during the peak of the equity bull run till early January 2008, have incurred heavy losses because of lack of enough revenues vis-à-vis higher costs, amid the sharp decline in markets.
While some are believed to have cut down operations to the bare minimum to just service existing clients, a handful are believed to be on the block, but have not found enough buyers due to adverse market conditions.
Source:Economictimes
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