As a result, the AMC will get to manage the entire investments of its partner, Standard Life, in India amounting to nearly 29 million in its FII account. "We will then be able to act as their advisor for their investments in India," Mr Barve pointed out.

Besides, the mutual fund would manage the equity portfolio of HDFC which is now a little over Rs 200 crore. The AMC will also be able to provide investment advisory services to its insurance joint venture with Standard Life once it is set up. "Under the existing guidelines laid down by IRDA we can only have an advisory role as management of funds will be in the hands of the insurance company," he explained.

Once the portfolio management business takes off, Mr Barve said the AMC would also develop contacts with high networth individuals seeking portfolio advice and related services.

HDFC Mutual's initial public offering of three schemes - a growth fund, an income fund and a balanced fund managed to raise Rs 653 crore from 1.02 lakh investor accounts. The income and the growth funds accounted for bulk of the money moblised at Rs 397 crore and Rs 136 crore respectively.

Interestingly, Mr Barve said, the number of accounts in the income fund was only 26,000 against 44,000 for the growth fund partly because average application amounts for income funds were much higher because of corporate applications.

HDFC Mutual Fund can boast of a strong retail bias as is evident from the profile of its investors. An internal study, Mr Barve pointed out, showed that nearly 90 per cent of the accounts had less than Rs 1 lakh investment and almost 50 per cent of the accounts had investments of less than Rs 10,000.

Incidentally, the mutual funds schemes are reopening for sale/purchase on a continuing basis from around September 20. "Our strategy is to be fully invested in our equity fund latest by December this year. So far we have invested 25 per cent of our equity funds and prepared to wait and invest at attractive levels," Mr Barve stated.

"As for the income fund, our short term strategy is tuned to our view on interest rate movements which we think will either be stable or move up. As a result, we are constructing a portfolio having an average maturity profile of 12-14 months with an investment horizon of 15-18 months. The complete portfolio should be ready within the next three months," he added.