In 15 months since Madhu took over as CEO of Union AMC, the fund house has more than doubled its AuM from Rs.12,000 cr to overRs.25,000 cr on the back of an impressive 50% growth in investor base.
Madhu spelt out 15 months ago the core principles that would guide the fund house: consistency, simplicity and responsibility. Fund performance consistency can be gauged from the fact that 80% of equity AuM is now in top quartile.
Product communication as well as investor education initiatives have remained simple and impactful. Responsibility can best be gauged by the AMC’s investor-centric approach over business-centric approach towards fund launches.
Its latest fund launch – Union Diversified All Cap Active FoF – is a good example of simplicity and convenience for investors. This FoF wrapper takes away the puzzling decision for investors on which cap size fund to own when and also takes away the tax disadvantages of switching between capsize funds while trying to generate alpha.
The FoF will have 40-60% as its core/anchor – which will be invested in Union Multicap Fund. The balance 60-40% will be allocated tactically between Union MF’s Large Cap, Mid Cap and Small Cap funds.
The initial portfolio may allocate close to 60% as anchor and the balance could have a small and mid cap tilt – at least based on signals that the parameters are giving now. Parameters for tactical allocations between cap sizes will include relative valuations, valuations vs history, growth and flows.
An all-cap equity FoF can serve as a simple solution for investors wanting equity exposure without trying to assemble an array of diverse funds. It can also serve as a good starter equity solution for young and first time investors.
Beyond this fund launch, Madhu is busy creating capacity and capability across verticals including MFs, SIFs and Gift City to prepare the fund house to gather scale and deliver on his mission of hitting Rs. 1 lakh cr in overall AuM within the next 4 years.