The wait is over. Housing major, Housing Development Finance Corp. (HDFC) is the latest player to hop onto the mutual fund wagon. The AMC has targeted its launch by third week of July.

A lot of people are asking - What's a housing finance company (HFC) doing in asset management? What kind of synergies does a HFC have between housing and asset management? Plenty if you are HDFC. The synergies for HDFC are all there. For one distribution. HDFC has an enviable distribution network of 72 offices spanning across the country. And that's not all. HDFC will banking (no pun intended) on HDFC Bank's network (119 branches) in a big way. So distribution and servicing is the least of HDFC's worries.

HDFC Bank has a base of over 1 million depositors. Add to it the fact that it is the numero uno depository participant (370,000 depository accounts) among banks and is second only to Stock Holding Corp. (SCHIL) over all. Moreover it has over 1 million depositors and 800,000 borrowers (past and present). All this will stand HDFC in good stead when it begins the roadshows for its schemes.

Branding is another thing that HDFC won't lose too much sleep over. The HDFC brand has to be among the country's most recognizable brands enjoying an instant recall among even non-finance individuals.

And of course there is asset management experience. HDFC's treasury (headed by Milind Barve) has managed funds both for itself as well as Standard Life. So its got the right kind of experience already. As far as products are concerned, HDFC MF plans to launch plain vanilla growth, income and balanced funds to begin with.

However, the success (or lack of it) of HDFC MF's products is something that will be tested over a period of time. As yet it is an untested entity in the mutual fund business. It would be imprudent to comment on the performance of its products until at least 6 months have passed. But given HDFC's success in most ventures it has undertaken, success is not something that HDFC MF will lose too much sleep over either.

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