imgbd CEO Speak

New CEO aims to double AuM next year

Swarup Mohanty, CEO, Mirae Asset India

24h February 2016

In a nutshell

Swarup is setting a cracking pace for Mirae Asset upon his elevation to the top job. His immediate aim: to more than double the AuM from 3000 crs to USD 1 Bn (6800 crs) by next year.

Mirae Asset he says is a one product per category AMC - tight product basket, with equal focus and attention on each product, and a commitment to make each one a happy experience for investors.

Distribution engagement is not about throwing more people in to engage with partners - its about the quality of engagement, the consistency and clarity of communication and the value you add to your partners in the process. It is distributors' trust that gets enhanced allocations for a fund after an initial performance driven allocation. Mirae Asset hopes to build on these strong relationships to become a "Top 15" equity AuM player, soon.

WF: Congratulations on your elevation to the CEO position at Mirae Asset! What have you taken on as your 3 top priorities in this expanded role?

Swarup: Thank you. Let me first share a backdrop to where we are, at Mirae Asset currently. I have been with Mirae Asset for close to 5 years. Mirae Asset has seen a strong growth in AUM, folio count and market share over the past couple of years (AUM stands at 3,000+ crores). It is due to the strong and consistent ground work we had put in the previous years (especially when market conditions were not supportive).

We would like to continue with our processes and approach, which have been yielding these results. This would mean consistency in communication, continuation in working closely with partners and consistency of performance. We believe sticking to these basics will help us grow the business further and gain market share. Our immediate target is to achieve 1 billion USD in AUM and be amongst the Top 15 Equity AUM based AMC's. We are confident that we should see us reaching this by sometime next year. We believe our current growth and success has been due to working closely with our partners. It is due to their trust that we have come this far. We would continue to work closely with our partners to help us reach our mutually agreed goals.

WF: Mirae Asset stands out as one of the few exceptions among the "smaller fund houses" that are getting significant business traction in an environment where many believe the big are getting bigger and crowding out the smaller fund houses. Is it just fund performance that is responsible for this success or is there more to it?

Swarup: Mirae Asset has been consistently gaining in market share and is amongst the fastest growing AMC's. We believe that this is the result of team work across all departments in the organisation. The Investment team remains the pillar of our organisation and they have continued to perform consistently across market cycles and conditions. Initial allocation to any fund happens due to good performance. Increase in allocation is then a collective function of the Sales and Marketing process and service levels which the fund house demonstrates in the marketplace. We believe we have shown consistency in all these areas in the market in the last 5 years. It has practically been the same team members across functions interacting with our partners in all these years. This has resulted in increase in faith for us from our partners which has led to the consistent growth which we have been witnessing so far.

WF: You have seen and worked with different fund management teams in the industry closely. What sets apart Mirae Asset's equity team? What contributes to their spectacular success?

Swarup: Mirae Asset was founded by a fund manager, Our Chairman -Mr. Hyeon Joo Park. The core value of the organization is to create wealth for Clients by nurturing long term relationship with the help of partners. We are very proud of our investment team.

They have stuck to the investment principles and created a consistent performance track record. They have worked closely with Sales team to interact with partners and communicate our thought process. The organisation's emphasis has always been development of products and consistency of their performance over asset gathering. This approach makes us unique.

WF: Mirae Asset is perceived as a boutique equity expert. Are you looking at evolving the firm into a full service fund house, or would you prefer to remain a boutique equity expert?

Swarup: When I joined Mirae Asset 5 years back, equity was one of the biggest asset allocation for the Mirae Asset Group. In the past 5 years the Group has made significant investment in ETF's, Fixed Income, Real Estate and Private Equity. In India, we are just about completing our first leg of business. We feel we now have decent product basket on the Equity side of the business. The key now would be to develop a good track record for all the products. We are a one product per category AMC. We launch products when we have the conviction of being able to manage them and create wealth for our clients through them. We are in the process of adding clients into our Debt Funds. We do want to build the Debt side of our business slowly and cautiously.

WF: Distributor engagement is a key challenge for smaller fund houses - due to lack of adequate team size to cover the market and lack of distributor mindshare to work on. You and your team have done an excellent job despite these constraints. Looking back at your previous role, what would you say were the most satisfying moments and what were the most challenging ones?

Swarup: I believe the key is what and how you communicate with your partners, rather than physical presence of people and branches. I think we have done very well in this aspect. Our communication has been clear and we have been able to provide value added support to our partners. Globally we have seen many successful organizations having smaller sales team but large assets - we believe this is where we want to be. We would use technology in the future to help us engage more effectively with our partners.

The challenging period for me was during my joining days, as there was reluctance on part of distributors in partnering with us. It is now a growing satisfaction that partners are recognising us for our work, processes and consistency of communication and performance. Some of our partners have become brand ambassadors for us and are helping us get more partners and get bigger market share of business.

WF: What is your vision for Mirae Asset over the next 5 years? How different will it be 5 years from now and in what ways would you want it to remain the same in 5 years?

Swarup: I believe in having short term goals, along with long term goals. Though the organization has a long term goal, considering the changing business environment, it is imperative to look at short term goals first. As mentioned earlier our immediate target is to achieve 1 billion USD in AUM and be amongst the Top 15 Equity AUM based AMC's. In the long term I would like Mirae Asset to be known as a strong product developer. There is no greater pleasure for an asset manager than to have investors who have created wealth. We can do that only if our products develop strongly and create enough wealth for our clients. This is the only way to create successful partnerships with our advisors.

WF: What are your plans on the products, sales and marketing aspects for the new financial year? What can your distribution partners expect from Mirae Asset under your leadership?

Swarup: As mentioned earlier, the organisation's emphasis has always been first on products and consistency of performance. We have just launched two products last year - Mirae Asset Prudence Fund and Mirae Asset Tax Saver. The clear objective for the sales team this year would be to get our partners to start recognising these two funds and convince them to recommend them the way they recommend our India Opportunities and Emerging Bluechip Fund.

As we build clients in our Cash Management Fund, we expect to start getting bigger allocations through the STP route too. We believe the STP and SIP way of investing will become large in the next few years and we hope to get meaningful share of that space too.

I believe our partners do not need new products, they need good and strong products. At Mirae Asset, we are building a business of conviction. We will not give them an alternative to our existing products. We are now in entering into the 9th year of India Opportunities in the Multi Cap diversified category and the 6th year with Emerging Bluechip in the Midcap category. If you project this track record to 5 years later, it has all the possibilities of becoming a strong story in the Indian Mutual Fund Industry.

Similarly over the years we have been able to establish strong relationships with our partners. They have started understanding us better. It is through their valuable feedback that we base our sales and marketing strategies. We expect to keep the same process of two way communication intact in the years to come.

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