Q&A: Achal Kumar Gupta
Achal Kumar Gupta took over as the managing director and CEO of SBI Mutual Fund in May this year. He was earlier the chief operating officer at the fund. In an exclusive interview with Priya Nadkarni, he reveals how the fund house aims to break into the league of India’s top three asset management companies.
How is the market slowdown affecting your business?
The market slowdown is confined to equity assets. FMPs and liquid assets are growing fast. We are the sixth largest in terms of assets under management and want to be among the top three in a year’s time.
We do not look at temporary happenings while setting up new branches.
We have 135 branches across the country and want to expand the number to 500 over three years. SBI is our biggest distributor, accounting for about 22 per cent of out total assets under management. We plan to open 35 offices and hire 100 people this year.
Give us an update of your offshore and portfolio management scheme (PMS) businesses.
We have an $16-$17 million offshore fund that is domiciled in Mauritius and dedicated towards equity investments. We manage Rs 5000 crore through our institutional portfolio management scheme (PMS). We have received institutional mandates from eight investors based in Korea, Japan, Hong Kong and Australia.
Under the PMS category, we also manage the Indian Government’s disinvestment proceeds of Rs 571 crore, held in the NIF fund. Most of the money is invested in debt, with only 5-10 per cent put into equities.
We are planning to introduce variants under our offshore fund, consisting of Shariah-compliant segment and infrastructure-related category, and have already written to Sebi in this regard.
Each of these would be sized at $100 million, depending upon the market conditions. We had started the offshore business on our own in early 2006. But, for the two variants, we expect a lot of fresh money to come from West Asia. Going forward, we will use Societe Generale’s reach in these countries to mobilise funds.
What kind of products are you looking at launching in India?
We have already filed an offer document with Sebi for the gold ETF and are looking at launching the international emerging opportunities fund. There are also products related to infrastructure, banking and financial services in the pipeline. We have to look at the appetite in the market.
We will file an offer document with Sebi for the Capital protection fund Series III and continue to launch fixed maturity plans throughout the year. We are planning to start retail PMS under our PMS business within a month’s time.
The first product will be a structured product, which will have a capital protection feature and use a dynamic portfolio technology. We will leverage on the expertise of Societe Generale asset management (SGAM). The minimum ticket size for retail investors would be Rs 5 lakh.
With the government stepping on the reform pedal and the Reserve Bank of India (RBI) likely to cut rates, we expect a mild recovery in both the ...