EPFO to call bids for managing its funds shortly

NEW DELHI: Retirement fund body EPFO has decided to call for bids from assets management companies shortly to manage its huge corpus of Rs 3 lakh crore for three-year period beginning July 1.

"The Employees' Provident Fund Organisation (EPFO) will float tenders during this month for appointment of AMCs for managing funds," a source said.

The source said that EPFO's apex decision making body Central Board of Trustees is expected to take final call on appointment of fund managers in June.

Once the tender is floated, the firms would be given 15 days time to submit their bids. Thereafter EPFO on the advice of the credit rating agency CRISIL engaged for the purpose, would take at least a fortnight to process the bids.

The list of shortlisted asset management companies would be placed before the CBT headed by the Labour Minister to take the final call.

Earlier this year as many as 11 asset management companies (AMC) responded to the expression of interest invited by the EPFO.

In addition to those who had managed the funds earlier, seven new AMCs, including ICICI Securities , UTI Securities and Kotak Securities , have evinced interest to manage the funds.

EPFO had earlier appointed SBI, ICICI Pru, HSBC and Reliance Capital as fund managers in August 2008 and their terms ended on March 31 this year. Before the appointment of the multiple fund managers in August 2008, SBI was sole manager for EPFO funds.

Since the PF body could not appoint multiple fund managers before March 31 this year, the CBT in its meeting on March 30 decided that SBI would manage all its funds for three months period till June 30 as an interim arrangement till the new fund managers are appointed.

One of the reasons for delay in appointment of the fund managers is that the EPFO had sent its tender document to Central Vigilance Commission for vetting to avoid any discrepancy in a situation when scams were surfacing.

The CVC has recently given in-principle approval to the tender document for appointment of the fund managers.

Source: EconomicTimes