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Kotak Mahindra Mutual Fund: Well Networked

The changes in the distribution business model may have impacted the AUM growth. However, once, the underlying regulatory objectives gain ground, one will see 'normalized growth' in AUM.

Financial service institutions are rethinking how to widen margins, reduce risk and solidify relationships with profitable customers. “Increasing service differentiation would emerge as the key growth determinant,” says Sandesh Kirkire, CEO, Kotak AMC. Expanding distribution is one way out that Kotak is working on.

Disappointing AUM growth: The recent slack in the AUM growth is primarily attributable to the steep liquidity outflow due to the 3G auction. Nonetheless, the changes in the distribution business model may also have had some impermanent and incidental impact.

Regulatory changes: I think the industry as a whole is witnessing a subtle, but gradual change in its business paradigm; with investment cost efficiency and transparency increasingly becoming a key distinguishing factor for all the industry participants.

The road ahead: Our emphasis is on enhancing our service model by way of improved competitive performance.

My investing style: I am a firm adherent of objective-driven investment. The allocation is based on the asset performance outlook, time horizon needed, and a judicious mix of assets to temper any unforeseen portfolio volatility. Real estate, equities, debt and gold remain the preferred investment asset.