Peerless cuts loss in mutual fund business despite adverse condition

KOLKATA: Peerless Funds Management Co. has cut its loss by 55% to Rs 4.85 crore in the fiscal 2011-12 even as its average volume of business fell on account of regulatory strictures on banks’ investment in mutual funds.

The fund manager is wholly-owned by Peerless General Finance & Investment Company (PGFI) and deals largely with institutional players with 97% business coming from them. It started operation in early 2010.

Peerless owner SK Roy said the asset management business is still in gestation period and the loss is well within the plan. In 2010-11, it had suffered a loss of Rs 10.72 crore.

Peerless Mutual Fund has managed an average asset under management of Rs 3,801 crore in 2011-12, lower than the preceding fiscal’s Rs 4,202 crore as banks faced restrictions in mutual fund investments.

Its retail business rose to Rs 143 crore last fiscal from Rs 43 crore earlier. The company plans to focus more on retail by leveraging its parents’ veritable database of 80 lakh small depositors, who had once kept money with PGFI before Reserve Bank of India told the group to shut deposit-taking business. PGFI has completely stopped the business in April 2011.