NEW DELHI, India -- In a move to boost pension fund investment in government bonds, the Indian government has granted private retirement funds permission to invest in units of mutual funds that invest solely in government securities.
Before the change, employer-sponsored pension funds, with about $22.5 billion in assets, could invest in government bonds only by buying them from authorized primary dealers.
The rule change went into effect April 1, but the government said there will not be any changes in pension funds' maximum allocations to different asset classes.
Pension funds must invest 25% of assets in central government securities, 15% in state government securities, 40% in infrastructure. The remaining 20% can be split among the three categories.
The government's easing of the rules is expected to result in the launch of a number of 100% gilt mutual funds. Indeed, Ajay Srinivasan, managing director of Mumbai-based Prudential-ICICI mutual fund said his firm plans to launch a gilt fund shortly.
Currently, only Kotak Mahindara, a Mumbai-based money manager, has a fund dedicated to government securities. Prakesh Dalal, head of marketing for the Kotak Mahindra Mutual Fund, which was launched in December, said: "It is a bonanza for gilt funds and we expect fresh money to come in."
Watson Wyatt merges Dutch office with Brans
AMSTERDAM, Netherlands -- Watson Wyatt Worldwide is merging its Dutch operation with leading Dutch actuarial firm Brans & Co. in a major push into the Netherlands.
Brans & Co., regarded as a premier actuarial firm, will add 100 employees to Watson Wyatt BV's 15. The merged Watson Wyatt Brans & Co. will be headed by Jan Oor, chairman of Brans & Co.
The combined investment consulting practice, which will number about 10 staffers, will be headed by Paul van Aalst, head of asset consulting at Brans & Co.
Brans & Co. will continue to cooperate with KPMG in the Dutch market. The Dutch actuarial firm decided to join Watson Wyatt's international network following the latter's purchase of some KPMG offices in the United States.
The combined firm will have offices in Amstelveen, Eindhoven, Rotterdam and Hoofddorp.
Pioneer negotiates to buy out Indian partners
CHENNAI, India -- Pioneer Management is negotiating to buy out its Indian partners in the Chennai-based Kothari Pioneer AMC.
Pioneer and Kothari each hold 47.5% of the $2.5 million equity of the company. Other domestic financial institutions own the remaining 5%.
Vivek Reddy, chief executive of Kothari Pioneer, confirmed the two parties have held preliminary talks on the issue.
Sources in Kothari Pioneer said the two partners have had good relations; Pioneer officials would like to boost their stake given the joint venture's strong performance in managing technology stocks. The Infotech Fund launched by Kothari Pioneer in August has returned more than 120% since inception.
Another fund, Kothari Blue Chip, returned 26.6% during the same time period.
In addition, the Indian government has proposed granting tax benefits to equity mutual funds.
Edinburgh enters Norwegian market
EDINBURGH, Scotland -- Edinburgh Fund Managers PLC is breaking into the Norwegian retail market.
The Edinburgh-based manager will offer four of its open-end investment company's equity sub-funds through Terra Finans, a marketing and distribution syndicate formed by 84 Norwegian savings banks.
EFM will offer U.K., Europe (ex-U.K), U.S. and global stock funds through the syndicate.
Bass consolidates custody with State Street
WEST BROMWICH, England -- The Bass PLC Pension Plans, with L2.1 billion ($3.4 billion) in assets, have consolidated custody with State Street Bank and Trust Co., London.
Previously, either the funds' money managers or external custodians provided custody. William M. Mercer, London, was the consultant.
