The Asset Management Industry in India

Abstract

The Asset Management Industry in India consists of a vibrant and rapidly growing mutual funds sector, an insurance sector that is dominated by unit-linked insurance plans, and Venture Capital Funds, both domestic and foreign. Also Foreign Institutional Investors form a category that pool foreign retail or institutional funds and invest in Indian debt and equity. Private Equity funds – both domestic and foreign – constitute a booming segment as well. In the last decade or so, this industry has witnessed a wide range of regulatory changes that have brought about increased competition and a very impressive growth rate. Mutual Funds and Insurance sectors have been opened up to private players only 16 and 8 years ago respectively. Venture Funds have been allowed even more recently. The Indian equity market with its remarkable bull run throughout most of this decade right up to the crisis has boosted major growth in the asset management industry. Even now, India stands poised at the threshold of major regulatory changes that can open up new segments like Real Estates and Pension Funds to retail investors and private and foreign fund managers. The rapid growth of the sector is likely to continue once the dampening effects of the ongoing crisis are behind us.

Keywords: India, Mutual Funds, Insurance, Venture Funds, Pension, Private Equity

JEL Classification: G15, G20