Go long, it's a quantum state

INVESTING

Now you see it, now you don't: the story so far of Quantum Asset Management Company in India.

Okay, while nobody's looking, read this. Quick. The question of Quantum Asset Management Company's existence in India has been settled. Or, to be accurate, probably settled.

It has received approval from the Securities Exchange Board of India (SEBI), the market regulator, to launch its maiden Quantum long-term equity fund in India.

But it does not want to face the glare of needless mass market publicity. It has not even appointed distributors, de rigeur among all funds fanning out, and does not intend to "" although it is open to tie-ups with banks.

Ajit Dayal, director of Quantum AMC, justifies this on the reasoning that paying Rs 5-6 in commission for every Rs 100 a customer invests to a distributor is a gyp deal of sorts. Another reason is that Quantum sells itself as a focus play for the choosy investor rather than a wide-net investment vehicle.

This also means that Quantum must make do with a small customer base, perhaps a hedge-fund sized one.

So be it, says Dayal, who prefers the subtlety of word-of-mouth among those predisposed to the brand, over the brouhaha of mass media exposure. Its advertising "" it exists, in print "" has been duly soft spoken.

Dayal himself has been a deputy chief investment officer for Hansberger Global Investors and also instrumental in building a 150-person organisation of Hong Kong-based Jardine Fleming in India to provide research, investment banking and other investment services in India.

The equity game, to Quantum, should always be a long-term one for any complex strategy to attain any coherence in actual application. To the retail investor, the deal is simple: do not gamble, invest.

At least for two years at that too. To discourage the short term thrill seeker, Quantum charges an exit penalty of 4 per cent for six months, 3 per cent for six to 12 months. It is 2 per cent for 12 to 18 months and 1 per cent for 18 to 24 months.

As its operations get going, Quantum also plans to launch a fixed income fund and balanced income fund. Still, with a domestic networth of no more than Rs 10 crore (the statutory minimum by SEBI rules), this unit promoted by Quantum Advisors does not have the look of a large player. That, in itself, says something.