IPO Focused Edelweiss AMC’s MF Platform Has Been Very Popular, Says CEO Radhika Gupta to BrandSutra
RADHIKA GUPTA, MD and CEO of Edelweiss Asset Management Limited, is optimistic about the company’s high growth curve, but is careful not to be complacent. Here, the 38-year-old woman, who considers herself a borderline millennial, talks about launching an IPO mutual fund at a time when the industry is teeming with IPOs, creating products for a young audience, the success of the l ‘company in the fixed income passive space and other fronts, as well as its goal of having 40-50 lakh investors on board in the future
Your leadership at Edelweiss Asset Management has led it to high growth – Edelweiss Mutual Fund was among the top 15 money market funds last year. So what are some of the talking points within the company right now?
We came in 15th, but we really think this is just the start. It’s the season of the Olympics – it’s a good time to say that we are a very ambitious company. We are here for growth. We are here to perform, to do well. We want to make sense in this profession. Even more encouraging than being in the Top 15 is that over the past year we have doubled our customer base. Plus, more and more customers are writing these really adorable posts to us on social media and email. If you build a brand that people love, you get and benefit from these favorable winds because MF is ultimately a company you can trust. But we don’t want to get complacent. The theme of the company is “Good to big”. We started 3-4 years ago on this trip. We have seen early victories and progress. We are confident in what we want to do and what we don’t want to do. We are in a constant state of work in progress. We also know it’s a raging bull market. So we want to be very responsible at this time. We want to make sure that investors are investing in the right way and that whoever joins us on this journey stays for the long term. Things go wrong when expectations are not met. So we built this brand with a lot of love. Obviously, we are bubbling over with ideas; we have existing funds that are doing well, we have new products to launch and we are recruiting additional talent in the areas of investment and technology, which is our core business.
From now on, the DIY mode is developing among investors. Even kids talk about investing in IPOs. What advice would you give to the investor?
A lot more people are entering the industry. There is no average of these people – they are in all income brackets, a lot of young people. Young India is much more ambitious, with a lot of things including their money. I’m still a borderline millennial, and I think it’s a good thing to be ambitious. In fact, one of the constant learnings is how to create products that cater to that audience. We are the only company to have a dedicated platform for IPO mutual funds, which in fact just opened for subscription last month. It’s been very, very popular, not only because of the track record and uniqueness of the offering, but also because of the timing. For DIY investors and for investors in general, what I will say is: there is no right answer. For 95% of people, some advice and guidance is extremely important. Having said that, if you choose to invest, you should. But whatever you do, remember that money is hard earned and should be treated responsibly. While you are making money, you can enjoy it and spend it. At least for 80% of your money, pay close attention to the type of risk you are taking, to the planning. If you want to have fun with 20% of your money, that’s fine. If you want to DIY, buy stocks at random, try out a random IPO, or make cryptocurrency, you’re good to go. But educate yourself before making any decisions; don’t do it just because you read something on google or saw someone give an interview on youtube etc.
What future for Edelweiss Asset Management? What are your long and short term plans for the company?
Short Term Packages – there are a few areas where we have done well, and we will continue to do well. We like hybrid funds and balanced advantage funds; this will always be very important. We were the first leaders in places like international funds, which really took off. We have six funds there, including a very popular Chinese and American tech fund, which is the first to hit the market. We will have another product in this space soon. We were the first players and market leaders across the fixed income passive space with Bharat Bond then the following products. We’ve had a great response from consumers, whether rates go up or down, our fixed income consumers aren’t complaining, and we’re going to do a lot more work on that front. We will continue to strengthen our investment teams and improve our digital reach and digital offerings. We just redid our entire web experience. We will be working on our application experience now.
the long term plan is to build a relevant business, which adds value to channel partners and customers and to fulfill the mandate. I saw Edelweiss Mutual Fund with 10,000 investors, I saw us with seven lakh folios. I hope that number will be 30, 40 or 50 lakh folios in a few years.
What are the inherent risks that you see in today’s asset management industry as a whole? And how do you negotiate this? What needs to be improved in the industry?
Every industry in the capital markets comes with risk, especially asset management, because we are inherently cyclical. The good markets are coming, everyone rushes into stocks, sometimes without thinking. People are forgetting their asset allocation, throwing caution to the winds. They look at the returns for the past year and they see 50%, 60%, or 70%. We all know it’s not repeatable. Lots and lots of new fund offerings are on the market right now. We have been one of the fastest growing countries, but we are trying to avoid the frenzy. A little slower growth rate is OK. We have been very responsible in our recommendations. Even when there was an international investing frenzy, we told people to go for international funds because of the benefits of diversification, not because tech stocks gave a 90% return.
A lot of people invest by looking at a single metric, which is returns. On our website we have a document for each fund called ‘Behind the Scenes’ where we explain a lot of data and what exactly we do in the fund, but in a very simple and understandable way. So we say things like “Don’t invest in our equity funds if you don’t have five years of patience.” Very simple language. The biggest challenge in our industry is penetration; another big challenge as well as an opportunity is digital reach. COVID has shown us that we can operate entirely digital.
What are you looking forward to?
I grew up in a very optimistic family so I am generally life long. I like the job I have. I love the industry. I think that among the financial services companies, MF is one of the best, simply because the scope of opportunities is so wide. Over the past three or four years, we have built a company and a culture that we are passionate about. We have a lead in the last few years, so we are going to pursue it.
What kind of leader are you – what is your leadership mantra?
Letting leadership is probably my style. The office corner model, in any case, is a very questionable old school model. I have a much more approachable, easy-going, and hopefully slightly more compassionate approach. Why does the CEO have to be someone who wears a cape, doesn’t have issues or bad days, and doesn’t talk to the team? Why can’t he just be another person?