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Fund
People : The fund Kingpin
This man routes more corporate money into mutual funds than all
banks taken together
The Smart Investor Team
The last
year saw mutual funds capture a greater mindspace in the investment
horizon of big corporate houses. About 70 per cent of the total investments
in funds currently comes from corporates. And for most corporate investors,
the road to fund investments passes through Mumbai-based Mata Securities.
Last year, Mata Securities handled about 10 per cent of the total
institutional investments flowing into the mutual fund industry, making
them the largest individual player and definitely, a player to reckon
with.
Set up in 1999, when mutual funds weren't the most favoured investment
options for big ticket funds, Mata Securities targeted a trading volume
of Rs 50 crore but clocked a whopping Rs 1,300 crore. It hasn't looked
back since. In the last one year alone, Mata Securities mobilised
as much money as the likes of ICICI Bank, Standard Chartered Grindlays,
JM Morgan Stanley, Kotak and DSP Merrill Lynch put together.
So what's the secret of this success story? A very good understanding
of the fixed income and money markets, knowledge of the prevailing
and potential interest rate scenarios, of government securities and
the corporate bond market. Indeed, of all the components that go into
the portfolios of debt based mutual funds.
The 30-year Sameer Kamdar, national head, mutual funds, Mata Securities,
says "Besides following the routine procedures of fund investments,
we aim primarily at understanding the client's requirements. Then
come the additional services like getting the redemption cheeses on
time, sharing market intelligence, and general advisory."
It is these small items of additional assistance that make the difference
between a good fund mobiliser and a great one, Kamdar feels.
Kamdar joined a Mumbai-based firm as an equity analyst in 1999 after
finishing his MBA from ITM, Mumbai and has since travelled along the
roller coaster rides of the mutual funds sector. But as far as Mata
Securities is concerned, the journeys have been fairly even.
Kamdar believes in what he calls the second-mover advantage. "Being
the second broker to approach a client has worked more effectively
for me. I generally do not like to make the first move. The strategy
is to analyse the client's requirements and then raise the standards
of facilities and assistance much higher than what the first broker
has offered," Kamdar says.
He feels that clients are more convinced if they meet fund managers
personally, and therefore, it is vital to have a one-to one dialogue.
"Firstly, the investor has to be comfortable with the idea of
investing in funds and it is the responsibility of the broker to ward
off any inhibitions that the former may have about investing his precious
money in the mutual funds sector," Kamdar says.
Another golden rule is that brokers must not raise the investor's
levels of expectations to irrational levels.
"A client will always remember what you have predicted and whether
the outcome has been in line, therefore it is crucial to explain the
complete scenario to the client and not have him expect irrational
returns," Kamdar expounds.
According to him, there are three important issues that should concern
the guidance given to investors: safety, liquidity, returns. "If
you want your money to be absolutely safe, you can't expect higher
returns." The risk-return trade parameters are essentially consequential
and the investor must be made aware of this.
"Explain to the client the upside and the downside of an investment
project and in a manner that is best understood by him. This becomes
a pre-requisite of our job because we are dealing with corporates
and therefore the size of the corpus is substantial," Kamdar
holds.
"The client is always concerned about how fast he can get his
money back. Also sometimes, different types of income funds from the
same fund house perform differently. Even within the same asset management
company, while an income fund could do well, a liquid fund may not.
With our experience, we recommend allocations into various funds so
as to gain the maximum benefits of a diversified portfolio. But ultimately
it is the client who takes the final call, after all it is their money,"
remarks Kamdar.
In his four-year career, Kamdar has come across clients who are brand
chasers and some who are comfortable investing in funds with bigger
corpuses, some go purely by returns. But he follows a more logical
route to guiding investors. If you have Rs 10 crore in a fund with
a corpus of Rs 1000 crore, you are relatively immune to volatile movements,
but if you've invested Rs 10 crore in a fund with Rs 100 crore, you
may be subject to a higher volatility, he explains.
But he says, "The client's attitudes have changed over the years.
The level of service and professionalism demanded has risen substantially.
Once the client is comfortable with your way of handling his funds,
he likes to stay with you, but you have to offer value propositions
consistently. The question is always, tell me what you can do better
than the others."
In the last three consecutive years, Mata Securities has won the PruWorld
award, which in the mutual fund distribution industry is akin to the
Oscars. That does not propel Kamdar to relax in his seat, "Given
that competition is intensifying and distribution commissions are
getting thinner by the day, we need to pull up our socks at all times."
Corporate houses are hoping to make the most of this situation, because
they are aware of their favourable positions. On the other hand, fund
companies are in a relentless pursuit of size, as asset accumulation
is the key in this business. As a consequence, distributors are getting
marginalised.
Abreast of all these developments and more, which he is reluctant
to divulge under cover of "company policies", Kamdar has
already charted out the future of Mata Securities. There are plans
to enter the insurance distribution business, and if at all the mutual
distribution does not provide the required stimulus for the company's
growth, he's sure that Mata Securities is best placed to make in big
in insurance. "With the kind of corporate-client relationships
that we have cultivated and maintained, selling insurance to corporates
may not be too difficult," claims Kamdar.
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