Investors exit Alliance-Zurich

MUMBAI: Investors have started pulling out their funds from Alliance Mutual and Zurich Mutual at a time when private sector mutual funds are raking it in. Both the asset management companies in December alone have lost over Rs 800 crore.
This follows the news doing the rounds that the parent firms of both these asset management companies are facing tight liquidity conditions abroad and they are considering selling their profitable Indian operations.Sources said these large withdrawals are bound to impact the firm’s valuations as bids are usually a percentage of total assets under management of a MF.
Though both the companies have not formally announced any plans of exiting India, investors seem to have got a whiff of the news and that several high networth individuals have started pulling out their investments from these fund houses. Recently, in a ‘related’ development, Zurich Mutual has consolidated its stake in its Indian operations by buying out its Indian stakeholder Raymond Ltd for a consideration of Rs 21 crore.
Sources, however, said the company headquarters have not yet intimated the sale plan to its Indian counterparts. For Alliance Mutual’s Indian operations, several bidders are in the fray including five domestic mutual funds, Prudential of US and AIG along with a management bid.