A year is a long time in any business; more so if the business has seen a transition in ownership. The asset management business has witnessed several changes that are still shaping the way business is done. In the midst of all this, last year L&T Finance acquired DBS Cholamandalam AMC with the entire portfolio of funds. Sanjay Sinha, CEO, L&T Mutual Fund, says the journey has been very positive and encouraging so far. He shares some of the events at the new fund house that he feels are true to its tagline: building solid foundations of a growing Asset Management Company.
What has been the market perception and reaction to the change in ownership? Has the L&T branding helped?
The over-seven decade history, values and branding of L&T have helped us a lot favourably. From a fund house that had a limited market geographically, we have a pan-India presence which is helping us acquire new investors. If in the 13-year old history of DBS Chola Mutual Fund we had a gross 1 lakh folios; in the past year we have added 50,000 gross folios and asset under management has gone up. There has also been an increase in SIP investments. The performance of our funds has also been encouraging. This has been noticed by distributor and investors alike who are reposing their faith in our abilities to manage their finances.
The feedback from the sales team is that distributors and investors are far more receptive. The brand espouses trust, which has seen a rising investor interest in our company. The L&T presence across geographies runs deep and helps us ride on the mother brand, which is well known and popular.
The product portfolio is almost complete; where do you see growth coming from in the future?
There are two noticeable gaps in the balanced fund space and variants of monthly income plans (MIPs) that limit equity exposure to less than 20 per cent. We have filed offer documents for both these products, which will bridge the gap and allow us to offer a full suite.
But we will be looking for growth across our entire product range. With the improved fund performance being acknowledged, especially the mid-cap fund and the MIP, we hope to find more investor interest in our offerings.
Personally, how has the journey been over the past one year?
Through the acquisition and transition process I managed to take the existing team along. But what has been bigger is the fact that we have added over 200 people in recent times, taking the team from 100 to over 300. Managing a growing team in a challenging environment has been a great experience. It has been more so when we have grown our business.
A lot has happened over the past one year with regards to the stock market. What is your view on where the market is heading?
The current state of the market is largely driven by apprehensions, especially about policy initiatives. If inflation is not tackled in the right way and is allowed to drift without clear policy measures, it will impact corporate earnings of the industry. We know that the Indian markets are driven by foreign investors. If no action is taken to assuage their anxiety, the situation can be worrisome. At the moment valuations are still attractive, especially for a contrarian investor.