Canbank MF to go solo as joint venture talks fail

Vijay Trivedi

Mumbai, Nov 27: Canbank Investment Management Services Ltd (CIMSL), the asset management company of Canbank Mutual Fund (CMF), has decided to continue moving ahead on its own in the MF industry as the two-month old talks for a joint venture partner failed last week.

Earlier, it was in talks with Commerzebank and Credit Lyonnais South Asia (CLSA) for a possible joint venture.

As on September 30, the fund has a total corpus of Rs 578 crore, invested by some 3.48 lakh investors in some 13 schemes of CMF — four tax schemes, four income-cum-growth schemes and two debt-oriented and the balance income schemes.

CMF plans to launch a new scheme, Canliquid during January 2002.
Speaking to The Financial Express, CIMSL executive director RK Madhukar said: “We have currently put on hold our plans of JV that we had been pursuing with Commerzebank and CLSA. The talks could not move ahead as some of their terms and conditions were not acceptable to our management.”

Further, Mr Madhukar said, “We are still open to the concept of JV, provided someone can help our fund through advanced technology and exchange their innovative ideas in the new emerging the market.”

Market sources say, the principal trustee of Canara Bank, has once again begun talks for a JV partner with other leading foreign partners, but Mr Madhukar refused to comment on the subject.
Thus, till any new joint venture partner is assocaited, Canara Bank MF would continue MF operations on its own.

According to Mr Madhukar, “We have well established distribution channel throughout the nation, sufficient years of experience in the industry and our scheme redemption too is very low.” With 14 years’ of experience in the MF industry, CMF has built up resilience and has nurtured a distinct in-house investment philosophy, said Mr Madhukar.

“Value for money approach has helped the fund to keep away from irresistible short-term market temptations which turn investment ethics into speculative hunting. As a result, the erosion in investment value of different equity-oriented schemes of CMF has been lower than those of aggressive fund houses.”

The fund has recently declared an interim income distribution of 10 per cent on the face value of Rs 10 in its debt-oriented balanced open-ended Canpremium Scheme.

It is expected to give final dividend of around 5-6 per cent on the same. This is the sixth income distribution of this medium to long-term growth scheme since its date of conversion.

The tax-free scheme has distributed Rs 4.65 (including present income distribution) on the face value of Rs 10 since February 1, 1998.