Mumbai: LIC Nomura Mutual Fund is finally set to begin its innings afresh with a new CEO and a new team from its joint venture partner Nomura. The mutual fund has seen its position slip from number seven at the time of the joint venture agreement in 2009 to 20th in terms of assets under management.
Nilesh Sathe, executive director in charge of LIC's northern zone, has been appointed CEO of LIC Mutual Fund — a 65-35 joint venture between Life Insurance Corporation of India and Nomura of Japan. Also a team of five senior executives from Nomura recently joined the company. Sathe is an expert in distribution, having built a new channel of chief life insurance agents at LIC by getting senior agents to mentor trainees. Former CEO Mohan Raj will move to head LIC's training centre in Chennai.
While LIC is expected to lead the distribution, is joint venture partner Nomura is expected to bring in the expertise in respect of equity fund management. This is an area where LIC has been lagging, partly because it does not pay private sector salaries to attract talent. Nomura has posted its executives on secondment from other offices. The chief operating office of Nomura holding, Yugo Ishida, is a board member.
The corporation is keen on improving the profile of LIC Mutual Fund on several fronts. The immediate target is to improve the ranking of fund, which has a corpus of less than Rs 6,000 crore. LIC MFs share of assets under management is less than 1% of the industry. LIC would attempt to leverage its distribution strength and brand. Officials at LIC said that considering that mutual funds such as Reliance MF and Birla SunLife MF have large pools of assets under management without having a bank within the group to distribute its products, the feeling within LIC is that LICMF could have a larger market share since the corporation enjoyed trust of policyholders.
In 2009, Nomura asset management company (AMC) had acquired a 35% strategic stake in LIC Mutual Fund for Rs 308 crore.
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