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A report released by the Kotak Institutional Equities reveals that some large PMS players have been witnessing net outflows since April 2023 due to not so good performance.
The report says that top 20 players saw net outflows of Rs.3400 crore from their discretionary PMS in April-September 2023. These PMS companies collectively manage assets of Rs.2.04 lakh crore in September 2023.
Of the top 20 PMS players, 13 PMS companies recorded net outflows between April and September 2023. Ask Investment Managers witnessed the highest net outflows of Rs.2700 crore from its discretionary PMS in the first half of the current financial year.
Both Quantum Advisors and IIFL Wealth recorded net outflows of Rs.1700 crore each, Motilal Oswal AMC saw net outflows of Rs.1600 crore in April-Sept 2023.
On the other hand, ICICI Prudential AMC recorded the highest net inflows of Rs.2300 crore. Valuequest Investment Advisors saw the second highest net inflows of Rs.2200 crore. Unifi Capital is the third company which recorded net outflows of Rs.1600 crore between April and September of FY 2024.
In terms of 1-year performance, the top 20 PMS players generated alpha of 1.8%. Abakkus Asset manager generated highest 1-year alpha of 19% followed by ICICI Pru (15%) and Valuequest Investment Advisors (14%).
The report said that outflows in discretionary PMS may benefit mutual funds. “We believe MF industry is potentially a net beneficiary of outflows seen from PMS funds.We look at the SEBI data for large PMS funds by comparing their discretionary AUM, 1Y alpha and net inflows in 1HFY24. This covers nearly Rs.2 trillion of AUM and likely covers about three-fourths of discretionary PMS AUM. We note that quite a few of these funds are seeing net outflows over the past 6-9 months, unlike the mutual fund industry. PMS inflows have been largely concentrated in funds with very strong outperformance versus benchmarks, whereas struggling fund houses have seen outflows.
