Less than five months of taking charge as managing director of UTI Asset Management Company (UTI AMC), Leo Puri has swung into action with an aim to make the fund house more efficient and profitable. The fund house has selected McKinsey & Company to advise on ways to restructure the AMC, Puri confirmed to FE.
Incidently, Puri was formerly associated with McKinsey as director and senior advisor.
According to sources, the decision to appoint McKinsey was arrived at after a close scrutiny of proposals submitted by various entities. ?There were other entities in the fray, but the kind of homework and background check that McKinsey did tilted the balance in its favour. McKinsey officials spoke to many UTI staffers to understand the issues being faced at various levels across verticals and, then, submitted the proposal,? said a person on conditions of anonymity.
While it could not be independently verified, it is believed that Boston Consulting Group (BCG) was also interested in the mandate. BCG was given a similar mandate by UTI MF a couple of years ago when current Sebi chairman UK Sinha was heading the fund house.
Responding to a detailed email query, Puri said that McKinsey was selected by the board of UTI AMC based on the experience that the consulting firm has in handling similar exercises.
?This is actually a management-led exercise to look at ways for UTI MF to take advantage of opportunities like opening up of the pension sector and emergence of newer distribution channels. The emphasis is on going beyond the top-15 cities and providing stronger customer service and staying ahead of the industry benchmarks. The exercise will also look at new ways for recruitment and managing the merit versus seniority issue. UTI is an iconic organisation but is performing below its potential,? said Puri in a phone conversation.
Meanwhile, sources said McKinsey will look at the various verticals of the fund house, including human resources, administration, fund management & schemes and distribution channels before submitting its proposed plan of action to the management.
The restructuring exercise being undertaken by UTI MF comes at a time when the oldest fund house of the country has seen its rankings slip in the assets league table. From being the number one fund house in 2006, UTI MF has slipped to fifth with an AUM of around R70,000 crore at the end of September.
Puri?s appointment was completed after a string of controversies which dragged the selection process for more than two years. In a recent media interaction, Puri ? who has earlier worked with private equity major Warburg Pincus ? said while he aims to make UTI the leading mutual fund house of the country, he would also focus on the profitability aspect and not just AUMs.