Investment in a fund house takes relatively longer to turn profitable: Jaideep Bhattacharya

Interview with MD & CEO, Baroda Pioneer

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Baroda Pioneer has beefed up its capital to meet with the new high networth norms. The fund house, an affiliate of state-owned lender Bank of Baroda, is one of the few fund houses to increase its net worth way ahead of the Sebi deadline. In an interview with Jayshree Pyasi, Baroda Pioneer, MD and CEO, Jaideep Bhattacharya spells out the fund house's strategy. Edited excerpts:

Most other fund houses are grappling with the higher Sebi's networth requirement. How did your fund house manage to hike its net worth?
The net worth of the fund house is currently over Rs 60 crore. To be honest it was difficult to convince our shareholders considering that investment in a fund house takes relatively longer to turn profitable. But, we had a strategic view for the business and announced our five-year growth plan, detailing our commitment to building a strong investment and service platform. The strategic review renewed the commitment from the shareholders Bank of Baroda and Pioneer Investments resulting in fresh capital being infused in the company in 2013.

What are the major strategic changes expected in near term?

At present, we are committed to the five-year growth plan that will see major expansion of the investment team, distribution strengths and services expansions. We have already have our top management being strengthen with top industry experts joining us to head our investment, sales and distribution teams. With key people in place, we are confident that in the next three years, Baroda Pioneer will be a major player in the Industry.

Taking a cue from Sebi’s thrust for presence beyond 15 cities this will be our next target. We are in the initial phases of a program to empanel new independent financial advisors (IFAs) across the country. We already have good flow of SIP coming to us every month but the expansion in rural areas will help us reach new customer. The Bank of Baroda presence in the rural areas will further our penetration in these areas.

Internet and new technology will be another tool that will act as a channel for us to reach out to investors for both distribution and servicing.

Where do you see the industry heading?
There is a lot of optimism in the industry and with the focus on expansion in beyond 15 cities we will see investor education play a major role in the expansion of the mutual fund industry. With the optimism in the market, we foresee renewed interest by the investors especially in the equity asset class. We have already seen almost 400,000 equity folio added in the month of April 2014, first time after many months. I think in near future innovation in product will play a crucial role in reaching new investors.