Mumbai: Rising incomes and demand for wealth management services is expected to push up the total Assets Under Management in the country to US $ 440 billion by 2012, from US $ 92 billion in 2007, McKinsey said in a report today.

While all asset classes will contribute to attain a 33 per cent yearly growth, retail mutual funds and portfolio management services (PMS) will act as the key drivers, the report said.

The report also sees an expected 36-42 per cent growth in the retail segment, which is expected to grow up to US $ 200 billion in 2012, as compared to US $ 36 billion in 2007.

"While 75 per cent of the AUM and 95 per cent of the retail profits were realised from the top eight cities, we expect the share of these eight cities to come down to 60 per cent and 80 per cent respectively, as the next tier cities show a faster growth potential," McKinsey Company Director Joydeep Sengupta said.

Subsequently, the institutional investments are likely to witness 25-33 per cent growth during the period and may touch US $ 160 billion in 2012 as against US $ 42 billion in 2007, the report said.

The report sees the mass affluent segment in the top eight cities in the country and the broad retail segment in the tier-II and tier-III cities will also contribute largely to the growth.
Source : PTI