AMC Speak 8th April 2015
Mere paas Performance hai
Jisang Yoo, CEO, Mirae Asset Global Investments (India) Pvt. Ltd.


"Mere paas Maa hai" - most Bollywood buffs have this iconic dialogue from Deewar etched in their minds. Put all the worldly comforts on one side and Maa on the other, no prizes for guessing who is better off. In much the same way in the fund industry, put brand, reach, commission structures, sales team size, product portfolio and marketing strategies on one side, and equity performance on the other - no prizes again for guessing who will be the long term winner

Mirae Asset is a classic case of living this out : a foreign brand which is unfamiliar in India, limited reach compared to most established players, commission structures that don't attempt to "buy" assets, modest sales team size, product portfolio that is still in the process of being completed. But the one thing that Mirae Asset has got going for itself is equity performance. That one thing has caught distributor attention, that one thing has seen Mirae Asset rapidly scale up equity assets - tripling its AuM in the last 18 months. Clearly, "Mere paas Performance hai" works in our industry just as eloquently as the Deewar dialogue did in the movie.

Jisang Yoo takes us through Mirae Asset's remarkable journey in India so far and gives us a curtain raiser into the company's plans for the future : Mirae Asset is now building on its performance track record to expand its product suite, expand distribution reach, engage closer with distributors and work towards emerging as a major player in the Indian fund industry.

WF: Mirae Asset is scripting a remarkable story of growth in equity assets in a fiercely competitive market on the back of superb performance. When you look back at the last 7 years journey in India, what would you say have been the biggest highlights for you and what have been the biggest learnings?

Jisang: We have been building a strong platform for our business in India, by building strong relationship with partners, creating a superior performance track record and thus creating a pleasant investment experience for our investors. We are happy to see that industry players across the country are recognizing us as a long term partner. We were well ahead of the market and understood from our global presence and expertise that an AMC needs to focus on making a strong business base based on the above 3 parameters and gather only profitable assets. We had been making profits for the last 3 financial years (which is very important, because market sentiments were very low at that time), by following the right processes.

Now with the market sentiments and scenario improving we would like to take steps to expand our business (which includes entry into new locations, addition of new services and products) in India. One of our key goals this year is to enhance our product proposition and provide varied investment solution to investors.

WF: Your flagship Mirae Asset Opportunities Fund has crossed Rs.1000 crsAuM - a fantastic achievement in this market place. What have been the key drivers that have helped deliver consistently superior performance?

Jisang: Mirae Asset Opportunities Fund was launched during a challenging time (April 08) and collected around 110 crores. We are very happy to share that our flagship product Mirae Asset Opportunities Fund has crossed Rs. 1,000 crores in AUM last month and has completed 7 years of superior performance record. We have built the AUM from a strong base of retail and HNI investor folios across various parts of the country and with help of many partners.

Our investment approach for the fund was centered around participating in quality businesses up to a reasonable price, and holding the same over an extended period. The fund combines consistency of Large Caps with conviction ideas from within midcaps. The fund has been consistently outperforming its benchmark since Inception and also has a Consistent Dividend Track Record (6 consecutive dividends in the last 6 financial years). The fund has delivered 18.31% CAGR returns compared to 9.31% returns delivered by S&P BSE 200 since inception. The fund has also outperformed its peers in a consistent manner across time horizon and is a top rated fund from all rating agencies with many awards and accolades. We hope we continue this Wealth creation journey for investors and want to thank our partners in helping us grow our fund in the correct manner.

WF: Distribution is seen as one of the biggest challenges for foreign AMCs to make meaningful inroads into the Indian MF business. What has been your experience with engaging with the Indian distribution fraternity? Is it prohibitively expensive to get distribution support or can you have a viable distribution partnership on the back of better products?

Jisang: To succeed in India you need to have a very different model from the various countries (I have worked in Korea, Brazil, US). The market has very low penetration and investors still have comfort investing with Indian entities. Like all foreign AMCs, we also had a challenging time on building up relationships and explaining to our partners about our processes and expertise. However I am glad to share that now our partners across the country are recognizing us as a long term partner and we have built mutual trust as well as delivering superior performance based on strong processes.

We are at a very important stage of our business in India, with our AUM more than tripling in the last 18 months. We have seen continuous inflows every month without any month of outflows, even when market was experiencing significant outflows. Our funds are up for approval with many banks/wealth outfits/institutions and distributor chains (as we have fulfilled necessary criteria of performance history and AUM). We hope to see further growth in our business going forward.

We have seen from our experience that though raising AUM is expensive in India (in other countries you have different share classes and the distributors are free to levy their charges), however if you build your business from a long term perspective and you engage with your partners actively (by actually helping them grow their business), then the cost of acquisition of assets is not very high.

WF: What are your plans to strengthen your distribution engagement in the new financial year?

Jisang: We have and will continue to engage actively with our partners, so we can mutually grow our business. We will continue to keep holding training programs, provide marketing and sales aids and arrange events to share market updates and best investment practices. We will try to leverage on our global knowledge pool to share insights on markets and financial market behavior, through Mirae Asset Knowledge Academy.

An important step to engage effectively with our partners is through our exclusive distributor website, which we have launched this week. Please find the url for the same.

We have made some interesting additions in the website with Quiz and Contests, Opinion Polls (to get the pulse of the market), IFA'S can contribute their articles and share their success stories, share industry data and information and many more features. We will also start equity certifications/tests, where we will try to gauge the knowledge of our partners on equity markets and hope to equip them with knowledge to grow their business. We hope to engage our partners and empower them with more knowledge and information.

WF: What are your product and marketing plans for the new financial year?

Jisang: We are planning to launch an open ended product which provides exposure to both equity and debt asset classes. We are also planning to launch a tax savings fund this financial year. One of our key goals this year is to raise AUM in debt funds from both domestic and international investors. We may look at a long duration fixed income product. All these product offerings will help provide better investment opportunities to our investors.

As mentioned earlier we have launched our exclusive distributor website this week by which we hope to engage our partners and empower them with more knowledge and information. We plan to be more visible across digital space especially and provide ease of transaction for our investors. We will share knowledge content and best investment practices through Mirae Asset Knowledge Academy (MAKA).

WF: What message would you like to give your distribution partners? What should they expect from Mirae Asset in the years ahead?

Jisang: To all our distribution partners who have supported us in our growth journey so far, I want to thank you for reposing your confidence in us. I look forward to working closer with you as we grow together in the years ahead.

To all distributors who have put us on their "watch list", my earnest request is this: you've seen us now for a few years, we have established a sound performance track record backed by robust processes, we are a long term player , we are well placed to serve your investors - lets now start doing business. It would be fair I think, for me to say that Mirae Asset now deserves a place in all equity portfolios of all your clients.

We hope to provide more investment solutions for our partners and investors and to provide better investment and transactional convenience with enhanced facilities. We want to become one of the major players in the Indian Mutual Fund Industry with a complete product basket across asset classes.

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