Morgan Stanley Investment Management has appointed Ritesh Jain as head of fixed income in India.
The role is part of Morgan Stanley Investment Management's strategy to expand its business and range of products in India's domestic funds market. Up to this point, the firm has been focusing mainly on equities products.
Based in Mumbai, Jain will serve as the lead portfolio manager for the fixed-income products with overall responsibility for the management of Morgan Stanley Mutual Fund's liquid and fixed-income schemes. Prior to joining Morgan Stanley, Jain was head of fixed income at Principal PNB Asset Management Company.
"We are focused on expanding our product range, and will shortly launch our first set of fixed-income funds," says Anthony Heredia, Mumbai-based CEO at Morgan Stanley Investment Management in India.
Morgan Stanley Investment Management is aiming to launch a short-term and long-term bond fund in the second quarter, details of which cannot be released just yet.
The plan to launch fixed-income funds is in line with Morgan Stanley Investment Management's overall growth strategy in India, according to Heredia, and does not necessarily reflect the firm's outlook for the local equities market.
"Our focus on fixed-income products is more in line with our plan to build an overall fund management business in India catering to both retail and institutional clients," he says.
Having said that, however, Heredia believes demand for local shares in India will likely remain moderate for many months to come.
"We think that markets will stabilise in the second half of 2009, and demand for equity products should follow with a time lag of six to 12 months thereafter."
The once highly active equities market in India has taken a sharp turn in 2008, with an estimated $13.8 billion pulled out by foreign institutional investors last year. Weak demand for equities has stalled new long-only fund launches in India, and fund managers there are increasingly turning to fixed-income products.
The India Magnum Fund, an offshore fund set up in 1989, marked the entry of Morgan Stanley in the Indian market. In 1994, the firm launched its first domestic fund, Morgan Stanley Growth Fund (MSGF). MSGF, which was launched as a 15-year closed-end fund, was open ended in January 2009. As of end-January, Morgan Stanley Mutual Fund managed a total of Rs14.6 billon ($282 million) in assets under management in its two portfolios, MSGF and Morgan Stanley A.C.E. Fund. MSGF is a diversified large cap Indian equity fund, while Morgan Stanley A.C.E. Fund is a diversified multi-capital Indian equity fund.
Morgan Stanley Investment Management, together with its investment advisory affiliates, has nearly 800 investment professionals around the world and approximately $399 billion in AUM or supervision as of end-November 2008.