HSBC scores India mandate to service fund assets
The latest mandate win for HSBC highlights a growing need among fund managers in India to outsource their fund administration operations.
HSBC has won a mandate from India's Canara Robeco Asset Management to service assets worth $930 million. The bank reportedly beat rivals Citi and Deutsche Bank in a competitive bid process to win the new mandate.
The announcement follows hot on the heels of another recent win by the bank. ICICI Prudential û one of India's largest asset managers û recently mandated HSBC to provide fund administration to over 100 schemes.
Fund managers in India have historically administered their assets in-house, but this is changing as they grow in size. "The trend towards outsourcing is gaining momentum, so those who have historically done it in-house are now looking actively to outsource that activity," says Vikramaaditya, head of HSBC securities services in India.
The outsourcing trend is being driven by concerns about their ability to scale-up as assets under management in India's fund industry continue to grow strongly.
Another factor is technology. In some cases their systems do not support multi-currency accounting. As Indian fund houses look to launch cross-border funds, these limitations become more apparent.
The third factor is the current attrition rates and shortage of talent, which has put pressure on some fund houses with small teams.
India's regulators are also trying to stimulate pension fund investments in this market, which is seen as a catalyst for growth in mutual funds, fund administration and custody services.
HSBC had $1.3 trillion in assets under funds administration and $6 trillion in assets under custody as at the end of 2007. Canara Robeco Asset Management is a joint venture between Canara Bank, one of the largest banks in India, and Robeco Group, a 75-year-old asset manager with AUM of more than $200 billion.
The announcement follows hot on the heels of another recent win by the bank. ICICI Prudential û one of India's largest asset managers û recently mandated HSBC to provide fund administration to over 100 schemes.
Fund managers in India have historically administered their assets in-house, but this is changing as they grow in size. "The trend towards outsourcing is gaining momentum, so those who have historically done it in-house are now looking actively to outsource that activity," says Vikramaaditya, head of HSBC securities services in India.
The outsourcing trend is being driven by concerns about their ability to scale-up as assets under management in India's fund industry continue to grow strongly.
Another factor is technology. In some cases their systems do not support multi-currency accounting. As Indian fund houses look to launch cross-border funds, these limitations become more apparent.
The third factor is the current attrition rates and shortage of talent, which has put pressure on some fund houses with small teams.
India's regulators are also trying to stimulate pension fund investments in this market, which is seen as a catalyst for growth in mutual funds, fund administration and custody services.
HSBC had $1.3 trillion in assets under funds administration and $6 trillion in assets under custody as at the end of 2007. Canara Robeco Asset Management is a joint venture between Canara Bank, one of the largest banks in India, and Robeco Group, a 75-year-old asset manager with AUM of more than $200 billion.
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