MUMBAI, May 7: Leading non-banking financial company Lloyds Finance, the financial services arm of the Lloyds group with a net asset base of Rs 1,500 crore, is all set to enter the mutual fund sector. The entry will be made in a rather unusual fashion by way of acquisition of an existing mutual fund.

Lloyds Finance managing director GC Garg told The Financial Express that the asset management company (AMC) that is being acquired is presently managing funds worth Rs 200 crore. He, however, did not reveal the name of the AMC saying that talks are in the final stage and the acquisition will be announced very soon. After taking charge of the fund, the company intends to reshuffle the portfolio of its schemes for boosting NAVs. He also said the acquired company would come out with more innovative products.

The group has a presence in sectors like leasing, broking, housing finance and real estate consultancy. Besides, it also offers services in consumer finance, merchant banking, investment banking, portfolio management, equity research and forex advisory services.

Explaining the company's foray into mutual funds, Garg said, ``The area which is not yet touched upon by us is fund management, and so we decided to enter the segment.''

Asked why the company is taking over an existing mutual fund instead of setting up its own fund he said,``When I am getting an already existing AMC why should I set up a new one.'' After acquiring a foothold in the fund management sector, the company also plans to go in for a joint venture with a foreign company. "But that is a long-term plan," Garg said.

Garg said the asset management scenario in the country is finally looking up with the entry of foreign fund managers into the traditionally sheltered domestic market. ``At a time when the mutual fund industry is coming out of its rocky phase and trying hard to establish itself once again, we think its the best time to get into asset management,''he said.

According to him, competition in the mutual fund industry is very healthy as there are around 34 asset management companies registered with the Securities and Exchange Board of India (Sebi) out of which 32 are already operational. He hopes to provide investors a better product-mix than what most mutuals are offering today.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.