UTI to go tech savvy

KOLKATA, AUG. 27. The country's largest mutual fund, Unit Trust of India (UTI), today promised to completely transform itself through a series of restructuring measures within the next few months.

The UTI chairman, Mr. M. Damodaran, told newsmen here that the Trust would be ``so very modern, technology savvy and customer driven that you will be surprised in a few months time". He said ``we have already put in motion a process of restructuring to maximise human resources and optimising the portfolio management structure".

Mr. Damodaran, who took over the reins of UTI only last month in the wake of Cyberspace controversy and arrest of former chairman Mr. P. S. Subramanyam, said there would be some radical changes in the organisational structure of UTI and creation of a holding company was also being considered.

He said fund management and equity research would be two key activities critical to UTI's future performance. It had committed to strengthening its capabilities in both these areas within the next few months. ``We may also set up one or more asset management companies to manage different funds. Today, we cannot set it up because of the Mutual Fund Act. I hope this Act will be amended soon," the Chairman said.

On US-64, he said re-deployment of suitable talent, performance orientation, fast-track promotions and bench-marking would constitute the first level reforms. Simultaneously, depending on the opportunities presented by markets, the scheme would see a reduction of exposure in certain scrips and sectors and the overall number of scrips would be rationalised, he said.Going beyond US-64, Mr. Damodaran said UTI would strengthen and refurbish all its other schemes, besides introducing a few add- ons to existing ones.

``Plans are under way to provide existing investors with the option of switching from one scheme to another, and also offering income options for those schemes currently not offering this facility, he said. - PTI

Our Kolkata Staff Reporter writes:

UTI will transfer all real estate holdings of US-64 scheme worth over Rs. 800 crores (at current prices) to some other fund owned by the company. Incidentally, all the real estate property of the Trust are now under US-64. UTI will also introduce net asset value-based trading of the scheme from October-end or early November, ahead of the January 2002 deadline. It is also planning to launch some sector specific and client group specific funds shortly.

Mr. Damodaran said the scheme now had a corpus of Rs. 12,800 crores. While the Trust was still debating the justification of further increase in corpus size, the sale of new units would remain suspended even after withdrawal of the existing ban on repurchase (over 3,000 units).While admitting that the Trust had an unusually larger exposure to equity (70 per cent of the portfolio), he said ``a scheme like this should have 55 per cent equity portfolio''. According to him, the Trust was well in control of the present problems and had not asked for any financial assistance from the Government or from other sources to safeguard the interests of investors. ``We have not borrowed anything from banks but only tied up the line of credit''. Assistance would only be needed in case of a dramatic slide in the Sensex.

In an effort to bring in transparency in operations, the Trust has entrusted its fund managers with full responsibility to take investment decisions. To safeguard the funds from clandestine decisions taken by top officials, the chairman's authority to take decisions for investment in the secondary market up to Rs. 40 crores has been delegated to a committee comprising two executive directors and the chairman. According to Mr. Damodaran, his membership in the committee will further be delegated to the third executive director in due course. The post is now vacant.Replying to queries on inter-scheme transfer of portfolio, Mr. Damodaran said though transfers were not always for the bad, he would be looking forward to stop the practice.

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