RADHIKA GUPTA, MD & CEO of Edelweiss Asset Management Limited, is upbeat about the company’s high growth curve, but takes care not to be complacent. Here, the 38-year-old, who calls herself a borderline millennial, talks of launching an IPO mutual fund at a time when the industry has a glut of IPOs, building products for a young audience, the company’s success in the fixed income passive space and other fronts, as well as her target to have 40-50 lakh investors on board in future
Your leadership at Edelweiss Asset Management has taken it to high growth - Edelweiss Mutual Fund was among the 15 largest MFs last year. So, what are some of the talking points at the company right now?
We've made it to rank 15, but we really believe it's only the beginning. This is Olympics season - it’s a good time to say that we're a very ambitious company. We are here for growth. We are here to be achievers, to do well. We want to be meaningful in this business. Even more heartening than being among Top 15 is that over the last year, we doubled our customer base. Besides, more and more customers write these really lovely messages to us on social media and email. If you build a brand that people love, you get those tailwinds and you benefit from that, as MF is ultimately a business of trust. But we don't want to get complacent. The theme at the company is ‘Good to Great’. We started 3-4 years ago on this journey. We've seen some early wins and some progress. We have confidence 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 that it's a raging bull market. So we want to be very responsible at this time. We want to make sure investors invest the right way, and whoever joins us on this journey stays long term. Things go wrong when expectations are not met. So, we built this brand with a lot of love. Obviously, we are bubbling with ideas; we have existing funds that are doing well, we have new products to launch, and we are hiring additional talent on the investment and technology sides, which is our core.
Now, the DIY mode is growing among investors. Even kids are talking about investing in IPOs. What advice would you give to the investor out there?
A lot more people are coming into the industry. There's no averaging of these people – they are across income brackets, a lot of younger people. Young India is a lot more aspirational, with many things, including their money. I'm still a borderline millennial, and I think it's a good thing to be aspirational. In fact, one of the constant learnings is how can we build products that cater to this audience. We are the only company to have a dedicated IPO mutual fund platform, which incidentally just opened for subscription last month. It’s been very, very popular, not just because of the track record and the uniqueness of the offering, but also because of the timing. For DIY investors and for investors in general, what I will say is: there's no right answer. For 95% of people, some element of advice and guidance is extremely important. Having said that, if you choose to invest yourself, you should. But whatever you do, remember that money is hard-earned and should be treated responsibly. While you earn money, it's okay to enjoy it, and to spend it. At least for 80% of your money, be very mindful about the kind of risk you take, the planning. If you want to have fun with 20% of your money, it’s okay. If you want to do DIY investing, or buy random stocks, try a random IPO, or do cryptocurrency, it is fine. But learn about it before taking decisions; don't do it just because you read something on Google or saw someone giving a YouTube interview, etc.
What next from Edelweiss Asset Management? What are your long and short term plans for the company?
Short terms plans - there are a few areas that we've done well in, and we will continue to do well. We love hybrid funds and balanced advantage funds; that will always remain very important. We’ve been early leaders in places like international funds, which have really taken off. We have six funds there, including a very popular China and US tech fund, which is first to market. We will have another product in that space coming out soon. We have been early players and market leaders in the whole fixed income passive space with Bharat Bond and then subsequent products. We have received great consumer response, whether rates rise or fall, our fixed income consumers don't complain, and we’re going to do a lot more work on this front. We will continue to strengthen our investment teams and improve our digital reach and digital offerings. We just redid our whole web experience. We're going to work on our app experience now.
The long-term plan is to build a business that is relevant, that adds value to distribution partners and to customers and to deliver on the mandate. I've seen Edelweiss Mutual Fund with 10,000 investors, I've seen us with seven lakh folios. I hope that number is 30 or 40 or 50 lakh folios in a few years.
What are the inherent risks that you perceive in the current asset management industry as a whole? And how do you negotiate that? What needs to improve in the industry?
Every capital markets industry has risk, especially asset management, as we are fundamentally cyclical. Good markets come, everyone rushes into equities, sometimes without thinking. People forget their asset allocation, throw caution to the winds. They look at the last one year returns and they see 50%, 60% or 70%. We all know it’s not repeatable. Lots and lots of new fund offers are in the market right now. We've been one of the fastest growing, but, we're trying to avoid the frenzy. A little slower pace of growth is OK. We've been very responsible in our recommendations. Even when there was an international investing frenzy, we told people to go for international funds because of diversification benefits, not because technology stocks have given 90% return.
A lot of people invest looking at a single metric, that is returns. On our website, we have a document for each fund called ‘Behind the Scenes’ where we walk you through a lot of data and exactly what we're doing in the fund, but in a very simple, 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. Our industry’s biggest challenge is penetration; another big challenge as well as opportunity is digital reach. COVID has shown us that we can run fully digital.
What do you look forward to?
I grew up in a very optimistic family, so I’m generally long on life. I love the job I have. I love the industry. I think among financial services businesses, MF is one of the best ones to be in just because the field of opportunity is very vast. Over the last three-four years, we've built a company and culture that we're very excited about. We have got runway in the last few years, so we will carry it forward.
What sort of a leader are you – what is your leadership mantra?
Not making a big deal of leadership is probably my style. The corner office model, in any case, is a very questionable old school model. I have a much more accessible, easy-going, sort of approach, and hopefully a slightly more compassionate approach. Why does the CEO need to be someone who wears a cape and doesn’t have issues or bad days and doesn’t talk to the team? Why can’t he or she be just be another person?
Radhika Gupta, daughter of a diplomat, studied at the Wharton School and University of Pennsylvania, before starting her career in the US, working at Microsoft and Mckinsey. At age 25, she decided to move back to India to turn entrepreneur and start a financial services business with two partners. In 2014, she sold her start-up, Forefront Capital Management, to Edelweiss, and is now MD & CEO at Edelweiss Asset Management, which manages Rs 50,000 crore assets for its investors. What defines Gupta is her success despite a birth defect that made her face more than her fair share of challenges. However, what stood her in good stead was her talent and her mother’s advice to ‘always tell the truth’. Her unique life story narrated in the video ‘The Girl with a Broken Neck’ has garnered over 2.2 lakh views on YouTube. “I’m still the girl with the broken neck. Sometimes I travel and at the airports, the security woman will ask me about my neck. But the one thing that's changed is, I don't mind it now. I actually smile about it,” Gupta says in the video.
Size Matters… Or Does It?
“In the AMC industry, size is a big deal. Until you are large, you really have to fight for your place under the sun. There have been so many random incidents, that I could write a book on them - where people wouldn't even meet you because you’re a small company. Once in Hyderabad, where 20 people were to come for a particular dinner and only three showed up, I was told, “Madam, chhote AMC ke CEO ko kaun milne aata hain?”! It’s also difficult to hire people. But I think your beginning really doesn't determine where you can finish. Ranks don't determine your potential,” says Gupta.
In Gupta’s words: “I realized that you can calm down the pace of life and still deliver great results. You can bring a little more ‘thehrav’ into life, as we say in Urdu. It's very healing for the body. Sans travel, I now have more time to do things I like to do; so I have more conversations with my mother, and time for cooking and reading, which is fantastic. Right now, I'm mostly reading poetry. I sometimes recite and read them. I like to write too. Meanwhile, we've been the most conservative about bringing back people to office. We really believe people can work from home in the industry that we are in, and our best financial years were the ones when we worked from home.”
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