At a time when talks to revive the country's ailing asset management industry are high, the sector continues to suffer with another problem - exit of top executives.
Nitin Rakesh, chief executive officer of Motilal Oswal AMC, has put in his papers. Industry's sources confirmed the development.
This year already witnessed a slew of top executives leaving, which include names like Jaideep Bhattacharya, chief marketing officer of UTI AMC, Arindam Ghosh, CEO of Mirae Asset, Piyush Surana, CEO of Daiwa Mutual Fund and Rajan Krishnan, CEO of Baroda Pioneer.
Motilal Oswal, chairman and co-founder of Motilal Oswal Financial Services, said, "We wish we could have him continue with us but he has got challenging global offer and decided to move. He is a brilliant person and did well for our AMC business since its inception some four years ago."
Interestingly, the resignation has come at a time when the fund house's exchange-traded-funds (ETFs) products were doing good and had managed to carve a niche out of it over the last few years.
However, looking the trend emerging out of the last few exits, it appears industry top officials are under fire. The latest exits from the industry have come at a time when asset management business in the country is going through one of its toughest phases. Stringent regulations, changes in business model, poor market conditions and investors' apathy towards equities have put tremendous pressure on industry executives to perform.
Some of the fund managers who quit earlier had told Business Standard that promoters and sponsors needed to give time. "Gone are those days when asset management business reached break-even points in 3-5 years. Now it is almost like insurance business with a gestation period rising to 8-10 years," a former mutual fund CEO who quit his job early this year had said.
They argue that there are no quick-fix solutions to this crisis. "It takes time as India is a complex market. But if promoters do not understand the reality and want their undesirable expectations fulfilled, one cannot help," he had added.
Last year, Sanjay Sinha had left L&T Mutual Fund in September to start his own financial advisory firm Citrus Advisors while Vijayan Krishnamurthy moved out from IDBI Mutual Fund in May.
During the financial year 2011-12, the average assets under management of the industry declined a little over 5 per cent. Currently, there are 44 fund houses in the domestic mutual fund space managing an AUM of Rs 6.92 lakh crore.