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Mirae bucks the trend in MFs

Strengthens India presence while other global fund houses exit; AUM up sixfold in 2 years

Chandan Kishore Kant  |  Mumbai 

Image via Shutterstock
Image via Shutterstock

Mirae Asset Mutual Fund (India), sponsored by South Korean financial major Mirae Asset Global Investments, completed its eighth year in India last month.

One of the newest fund houses to enter here, it was not smooth sailing, as its entry coincided with the global crash in the financial market. The struggle may be judged by its performance in the first six years, when the assets under management (AUM) failed to cross Rs 500 crore. This led to speculation that Mirae might join other foreign peers such as Fidelity, Daiwa, PineBridge, Morgan Stanley and Deutsche in exiting the India business. However, Mirae has had an impressive performance in the past two years. AUM is up nearly sixfold and it has got into the league of the top 20 equity fund houses.

Jisang Yoo, its chief executive officer (CEO), says: "Competition is extremely severe in India and that's why we had to first establish a strong business base and go slow but steady. We leveraged on our (experience) in managing assets in many countries and focused on delivering superior performance, rather than asset gathering. Further, we always kept an eye on costs and aimed at creating a profitable business base."

Mirae bucks the trend in MFs
Yoo, who shifted to India from Brazil in 2009, was concerned about structural imbalance in the Indian economy but says he always believed the country would emerge as a global economic leader. In 2012, when Mirae Asset's former CEO, Arindam Ghosh, had exited, Yoo replaced him.

In 2013, Mirae reached the break-even point and has stayed profitable. "For me personally the initial years were quite challenging. If you go to South Korea you can see Mirae Asset presence everywhere. Brand building in other country is extremely time consuming. We understood that brand building in India will take time and is very expensive. Managing people from different culture is also a big challenge. We took the tough job of working hard of creating a performance track record to grow the business. I am very happy that our promoters were very patient and gave time for the business to grow and mature," he explains.

With nine schemes, six in equity and three in debt, it has an AUM of Rs 2,857 crore. Equity is 95 per cent of its overall assets, highest in the segment. Till two years before, overall assets were Rs 642 crore, with equity at Rs 583 crore or 91 per cent. Since then, the number of investor folios has trebled from 50,000 to 150,000. Further, one of every three investors has a systematic investment plan (SIP) and its monthly SIP book has grown fourfold, from Rs 4.5 crore to Rs 21 crore. Two years earlier, the number of SIPs was only 15,000. Two of its equity schemes, Emerging Bluechip Fund and India Opportunities Fund, beat their benchmarks in the past year. The former has given a 12.6 per cent one-year return, beating the benchmark and category averages by eight percentage points. From a three-year perspective, the annualised return is 30.7 per cent, while the category average is 22 per cent and the benchmark is 15 per cent.

Yoo acknowledges that and adds that it's a collective team work and maintains that no staff at Mirae Asset has contributed less than him to the current growth of the fund house.

"We believed that asset gathering will happen eventually once we have created a set of 'Happy Investors'. Our funds are delivering good performance which is fueling our growth. We are happy that market participants have recognised our efforts," adds Yoo.

Its two fund managers - Gopal Agrawal, chief investment officer (CIO) and Neelesh Surana, head of equity - have always maintained a low-profile but when it comes to stock picks and conviction they are as good as any elderly fund manager would be.

Mirae aims to break into the top 15 fund houses by next year. To do so, apart from focusing on basis parameters like performance and profitable business, it is trying to expand its reach and has plans for new schemes. Two new fund offers came this year.

The story of Mirae AMC so far:

* In 2013, Mirae Asset turned profitable

* In last two years, AUM rose nearly five folds to Rs 2,857 crore

* Equity assets contribute 95% to overall AUM

* Number of folios at rises to 1,50,000 from 50,000

* SIP accounts at 50,000 against 16,000

* Monthly SIP book rises to Rs 21 crore from Rs 4.5 crore

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First Published: Thu, December 10 2015. 22:50 IST