New fund houses galore: Should you make the investment or skip?

Brokerages, portfolio management service firms and fintechs have ventured into the mutual funds space

- Jash Kriplani

One of India's largest financial services group. Bajaj Finserv, is the latest entrant in the mutual fund space, where about 40 fund houses operate. The Punebased company got the Securities and Exchange Board of India's (Sebi) nod to start mutual fund operations on 1 March.

The 39-trillion mutual fund industry has seen a lot of interest, of late, with entities such as fintechs, discount brokers and portfolio management service (PMS) firms vying for licences to operate funds.

Thus far, the track record of an MF scheme has been the USP of a fund house or fund manager; but now, innovative products as well as new approaches are drawing investors. So, here are some points to ponder upon when considering a new fund house:

INVESTMENT RECORD

MF distributors say investors may consider schemes of new fund houses, but should first check the track record of the fund managers, especially if the funds are going to be actively-managed.

"There is no issue with making some allocation with a new fund house, as long as the people running the fund house come with a strong track-record and experience in the fund management industry," says Anup Bhaiya, founder and managing director of Money Honey Financial Services.

Of the fund houses that have already got Sebi's in-principle approval to launch MF businesses, two are PMS providers Helios Capital and Old Bridge Capital, which are led by former star fund managers Samir Arora and Kenneth Andrade, respectively.

The founders of Helios, including Dave Williams and Karan Trehan, have a strong MF background. Williams was also a trustee of Alliance Capital MF, while Trehan was president and CEO of Alliance Capital International, where he set up asset management firms locally and distribution relationships globally.