RADHIKA GUPTA, MD & CEO of Edelweiss Asset Management Limited, is optimistic about the company’s high growth curve, but is careful not to be complacent. Here the 38-year-old, who describes herself as a borderline millennial, talks about the launch of an IPO mutual fund at a time when the industry has a flood of IPOs, developing products for a young audience, the success of the company in the passive Bond market space and other fronts, as well as their goal of having 40-50 lakh investors on board in the future
Your leadership at Edelweiss Asset Management has resulted in high growth – the Edelweiss Mutual Fund was one of the 15 largest MFs last year. So what are some of the talking points in the company right now?
We made it to 15th place, but we really believe this is just the beginning. This is the Olympic season – a good time to say that we are a very ambitious company. We are here to grow. We are here to be top performers, to do good. We want to make sense in this business. Even more gratifying than our placement in the top 15 is that we doubled our customer base last year. Plus, more and more customers are sending us these really lovely messages on social media and email. When you build a brand that people love, you get tailwind and benefit because MF is ultimately a business of trust. But we don’t want to get complacent. The topic in the company is “Good to Great”. We started this trip 3-4 years ago. We saw some early wins and some progress. We have confidence in what we want to do and what we don’t want to do. We are in constant progress. We also know it’s an angry bull market. That is why we want to be very responsible during this time. We want to ensure that investors invest properly and whoever accompanies us on this path will stay for the long term. Things go wrong when expectations are not met. So we built this brand with a lot of love. Obviously we are overflowing with ideas; We have existing funds that are doing well, we have new products to launch, and we are hiring additional talent on the investment and technology side, which is our core.
Now the DIY mode is growing among investors. Even kids talk about investing in an IPO. What advice would you give to the investor out there?
There are a lot more people coming into the industry. There is no such thing as an average of these people – they are across all income groups, a lot of younger people. Young India is much more ambitious with a lot of things, including their money. I’m still a millennial frontier worker, and I think it’s good to be ambitious. In fact, we are constantly learning how to develop products that suit this audience. We are the only company that has its own IPO mutual fund platform, which, incidentally, was only opened for subscription last month. It was very, very popular, not only because of the track record and the uniqueness of the offer, but also because of the timing. For DIY investors, and for investors in general, I say: there is no one right answer. For 95% of people, advice and guidance are extremely important. However, if you do decide to invest yourself, this is what you should do. But whatever you do, remember that money is hard earned and should be treated responsibly. While you are making money, it’s okay to enjoy it and spend it. For at least 80% of your money, pay attention to the type of risk you are taking, planning. If you want to have fun with 20% of your money, it’s fine. If you’re into DIY investments or want to buy random stocks, try a random IPO, or use cryptocurrencies, that’s fine. But learn about it before making decisions; don’t do it just because you read something on google or saw someone giving a youtube interview, etc.
What’s next with Edelweiss Asset Management? What are your long and short term plans for the company?
Short term plans – There are some areas where we did well and we will continue to do well. We love hybrid funds and balanced advantage funds; that will always be very important. We were early leaders in areas like international funds that were really successful. We have six funds there, including a very popular Chinese and US tech fund that is going to be the first to hit the market. We will soon be releasing another product in this area. We were early players and Market leader in the entire passive annuity sector with Bharat Bond and then follow-on products. We have had a great response from consumers, whether rates go up or down, our fixed income consumers are not complaining, and we are going to do a lot more on that front. We will continue to strengthen our investment teams and improve our digital reach and offering. We have just redesigned our entire web experience. We will now work on our app experience.
That long term plan is to build a relevant business that offers sales partners and customers added value and to fulfill the mandate. I’ve seen Edelweiss Mutual Fund with 10,000 investors, I’ve seen us with seven lakh folios. I hope that in a couple of years that number will be 30 or 40 or 50 lakh folios.
What inherent risks do you see in the current wealth management industry as a whole? And how do you negotiate that? What needs to be improved in the industry?
Every capital market industry has risks, especially asset management, as we are fundamentally cyclical. Good markets come, everyone rushes into stocks, sometimes without thinking. People forget their asset allocation, throwing caution to the wind. You look at last year’s returns and see 50%, 60% or 70%. We all know it’s not repeatable. Many, many new fund offers are currently on the market. We’re one of the fastest growing, but we try to avoid the rush. A little slower growth is fine. We have been very responsible in our recommendations. Even when there was an international investment craze, we told people to choose international funds because of the diversification benefits, not because technology stocks had returned 90%.
Many people invest when they look at one metric, which is the rate of return. On our website we have a document called “Behind the Scenes” for each fund where we guide you through a lot of data and exactly what we do in the fund, but in a very simple and understandable way. That’s why we say things like “don’t invest in our equity funds unless you have five years of patience”. Very simple language. The biggest challenge in our industry is penetration; Another major challenge and opportunity is digital reach. COVID has shown us that we can work completely digitally.
What are you looking forward to?
I grew up in a very optimistic family so I am generally lifelong. I love the job i have. I love the industry. I think MF is one of the best providers among financial services companies simply because the field of possibilities is very large. Over the past three to four years we’ve built a company and a culture that we’re really looking forward to. We’ve got a runway in the past few years so we’ll keep it going.
What kind of leader are you – what is your leadership mantra?
It is probably my style not to make a big deal of leadership. In any case, the corner office model is a very questionable old-school model. I have a much more approachable, casual approach, and hopefully a slightly more compassionate approach. Why does the CEO have to be someone who wears a cloak and has no problems or bad days and not talking to the team? Why can’t he or she just be another person?