About
BOI AXA Investment Managers Private Limited operated as a joint venture between Bank of India and AXA Investment Managers, a part of AXA Group, one of the world’s largest players in the Financial Protection industry.
In December 2021, BOI bought out its foreign partner –
AXA was said to be looking for an exit for a few years
Bank of India has over 5000 branches across India. AXA Investment Managers (AXA IM) is one of the world’s leading asset managers, backed by the strength of the AXA Group with assets under management (AUM) of EUR 858 billion as on 31/12/2020.
Bank of India (BOI) had acquired its 51% stake in the then Bharti AXA Investment Managers Private Limited (BAIM) and Bharti AXA Trustee Services Private Limited (BATS) in 2012. Consequent to this change in JV Partnership, BOI became a Co-Sponsor along with existing Sponsor, AXA Investment Managers (“AXA IM”) and the Fund was renamed as BOI AXA Mutual Fund, and BAIM was renamed as BOI AXA Investment Managers Private Limited, and BATS was re-named as BOI AXA Trustee Services Private Limited.
Key staff
The following were the key staff in the JV –
Bruno Guilloton is the incumbent CEO of the BOI AXA Mutual Fund division. He has been involved with the AXA-BOI joint venture in the Asia Pacific region now for more than 10 years. He was previously the Head of Equities of the AXA Assets Management section as well as the Global Head of Internal Audit at AXA IM later on. He was also with the Banque Indosuez and has worked with Indosuez Asset Management, where he was the Joint in-charge of Equity Management.
Robert Sherlock is currently the Chief of Risk Management of BOI AXA in Asia. He has extensive experience in Risk Assessment and minimising it from his previous capacities at AXA’s worldwide operations where he was the Internal Audit Manager and Risk Officer. Post his joining AXA AM, he has held a series of high-level executive posts, including the acting CRO of AXA Framlington. Mr. Sherlock is a highly feted Chartered Accountant who has also worked with KPMG in their offices at London and Hong Kong.
Investment philosophy
BAEF will invest predominantly in a diversified portfolio constituting equity and equity related instruments of companies that the Fund Manager believes have sustainable business models, and potential for capital appreciation. The fund would follow an actively managed approach allowing it the flexibility to pursue opportunities across the entire market capitalization spectrum, from smaller companies to well- established large-cap companies, without having any bias in favour of sectoral allocations or market capitalization. The investment environment, valuation parameters and other investment criteria will determine the allocation and the investment style. The Fund Manager would follow a top down approach to shortlist stocks for portfolio construction.
BAEDRF is a dynamic fund wherein the asset allocation between equity and fixed income is determined by the month end P/E ratio of the Nifty 50 Index. The portfolio is rebalanced on a monthly basis as per pre-defined P/E bands. The scheme’s asset allocation between equity and fixed income will be determined based on the month end P/E ratio of the Nifty 50 Index. The scheme will reduce weightage to equities as the P/E ratio of the market increases and vice versa. The equity component of BAEDR would follow an actively managed approach within the eligible investment universe comprising the Top 100 stocks by market capitalization listed on the BSE/NSE at the time of investment.
The Fixed Income investments will follow a disciplined investment process and endeavour to construct a well- diversified, high credit portfolio that minimizes liquidity risk and credit risk. The Fund Manager shall evaluate all the investment proposals to ensure that the credit risk is kept at the minimum level. The alpha to the portfolio will be generated by managing the interest rate risk across different asset classes and duration buckets.
Media
BOI AXA Credit Risk Fund had lost 50 percent of value due to the IL&FS write-off and then recovered. The following media articles cover the loss and recovery –
https://www.valueresearchonline.com/stories/50750/a-debt-fund-returning-150-per-cent-in-a-year/
Analyst questions
- Being a JV in the India market since 2012, how has the network of BOI and the Finance expertise of AXA been used to come up with the Investment philosophy of the AMC?
- Many of the funds offered have been given a 2-star rating by Morningstar, what steps are being taken to ensure the rating of the fund offered will increase in the near future?
Prepared by –Dhaval Davda, June 2020
Updated for ownership in 2022
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