Indian fund house UTI Asset Management Company has hired McKinsey & Company to find ways to make its business more efficient and profitable.
UTI Asset Management Company is India's sixth largest asset manager by size (Assets under Management). Over the past years it has gone through difficult times. In 2006 it was still India’s number 1 fund house, yet poor investments and internal turmoil between made it slip to sixth in the rankings. Over the past two years it even operated without a Chief Executive, following a high-stake disagreement between the largest shareholder (U.S.-based asset manager T.Rowe Price Group) and four Indian stakeholders. In July this year UTI finally appointed a new Chief Executive: Leo Puri, a former Director at McKinsey & Company.
Within a month after his appointment Leo Puri decided that an external consulting firm needed to be hired to review the internal organisation. Several firms competed for the complex but lucrative project, yet the final decision went towards McKinsey’s favour. "There were several consulting firms in the pipeline, but the kind of homework and background check that McKinsey did tilted the balance in its favour. McKinsey consultants spoke to many UTI staffers to understand the issues being faced at various levels across verticals and, then, submitted the proposal" said a UTI spokesman following the appointment.
In a recent press conference Puri was tempted in giving slightly more details on the bidding procedure. “McKinsey was selected by the board of UTI AMC based on the experience that the consulting firm has in handling similar exercises”.
According to Indian media Boston Consulting Group (BCG) was also close to getting the deal. BCG reportedly has a longer track record within UTI – it performed a similar analysis for the fund house a couple of years ago when the fund was still headed by the previous boss, Upendra Kumar Sinha*.
* Upendra Kumar Sinha is currently the chairman of The Securities and Exchange Board of India.