Chennai, Feb 6 :
In order to have better disclosure and transparency to boost investor confidence further, Reliance Capital Asset Management (RCAM) will announce the amount of money invested by group companies in the mutual fund, said an official.
The investment of group companies in RCAM, Dec 31, 2013, stood at Rs.3,274 crore ($528 million), accounting for 3.2 percent of the total average assets under management (AAUM) of Rs.102,487 crore ($16.5 billion).
“Our move is voluntary and is not mandated by the regulator or the government. Any additional disclosure will be better for genuine investors,” Sundeep Sikka, chief executive officer, told IANS over phone from Mumbai.
Disclosing the details of total investment by group companies in the AAUM would help the investor get a better view of the fund house.
“As the biggest asset manager in the country, we feel it is our responsibility to take disclosures in the mutual fund industry to the next level,” Sikka said.
He said the move could be a trend-setter for the mutual fund industry in the country. The company would make the disclosure on quarterly basis.
Investments made by the mutual fund in group companies are already part of the fact sheet that is being announced, he said.
“There is no right formula as to what would be an ideal ratio of investments by group companies and outside investors in a fund. Our attempt is to increase the disclosure norms,” Sikka added.
The company Thursday announced its decision to voluntarily disclose total investments made by group companies in its total mutual fund AAUM.
The company, in a statement, said in addition to disclosing its total mutual fund assets under management (AUM) and AAUM it would also be giving total investments made by group companies in its mutual fund AAUM.
According to RCAM, investments from group companies will include investments made by Reliance Capital Ltd. (Sponsor and holding company); Reliance group affiliate companies, subsidiaries and businesses including insurance, securities, power, infrastructure and communications, media and others.
“The size of the AAUM is one of the important criteria’s which helps the investors in taking an informed decision for investing in mutual funds. We need to help these investors by building their confidence with all such disclosures that can enhance their trust in the industry”, said Sikka.