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This article has been modified. Please see clarification at the end.
On June 29, a day before Tata Mutual Fund’s 20th anniversary, R Ganesh, former managing director of the world’s largest asset manager BlackRock Inc, took over as the new CEO and managing director of the fund house - the third CEO in less than three years.
Tata Mutual Fund, currently India's 12th largest fund house in asset size and backed by the Tata Group, was among the first private player entries into the sector during the mid 1990s, when the space was largely dominated by players sponsored by public sector entities.
The fund house commands an asset size of Rs 28,045 crore, a mere 2.3 per cent to the total asset of the sector, which stood at Rs 12.28 lakh crore the end of June 2015.
Tata MF’s asset size hardly does justice to the Tata brand name. Despite having such a strong pedigree, Tata MF is struggling to feature among India's top 10 fund houses.
Since March 2014, the fund house’s asset under management (AUM) grew from Rs 21,954 crore to Rs 28,045 crore - a rise of 27.75 per cent. This was less than the overall industry growth of 35.75 per cent during the same period.
The moot question is what prevents the Tata group from emulating its success in the country’s fast-growing fund management industry, dominated by the likes of HDFC MF, ICICI Prudential AMC, Birla Sun Life and Reliance MF.
Dhirendra Kumar, CEO of fund tracking firm Value Research, says: “Somewhere, the fund house is unable to get the retail connect despite being a top brand. Else, given the brand connect the group has in India, there can’t be any excuses why the fund house should not be in the top league.”
Will Ganesh with his two decades of rich global experience be able to make any difference?
Ganesh says, “There can't be a better time and place to be with the Tata Group.”
| A GLANCE AT TATA MUTUAL FUND |
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“We have a strong team in place and I propose to add talent and experience to complement my team in due course of time. We have to do a lot to rightfully get to the place we belong in the industry. The journey has begun and we will establish Tata MF as a premier and respected investment house in the country,” says Ganesh.
Areas of risk management, wealth management, technology and operations are among Ganesh’s top priorities. According to him, innovative products, consistent performance - staying in the top quartile and generating benchmark-beating returns - and making investors’ experience much better right from Know Your Customer to Systematic Investment Plan are the factors which are important to grow business.
In a recent meeting of Tata group’s CEOs, group chairman Cyrus Mistry is believed to have stressed upon the financial and wealth management businesses of the group. “I am aligning the vision of Tata AMC with the group's Vision 2025. Financial services vertical will continue to play an important role in the group's vision,” says Ganesh.
Tata Mutual Fund has nearly one million folios of investors, 2.3 per cent of the sector’s 43 million folios. Acknowledging the fact this is nothing but a drop in the ocean, Ganesh says: “We have just scratched the surface of the investor base. (However) it is too early to say that we could not capitalise on the Tata brand. Our success will only accelerate with the Tata brand at helm and we will continue to make up for lost grounds, if any.”
Despite being from a global financial background, Ganesh believes in ‘brick-and-mortar’ strategy. “The impact of technology and the role of social media are rapidly changing our thinking and the way of doing business. We have to harness this source and translate into better performance and service to the investor. A solid hand-shake cannot be replaced with an electronic message. Trust is personal and is to be experienced; it can't be replaced with the latest technology. We must remember it's our fiduciary responsibility of managing the hard-earned savings of a school teacher, a factory worker or a policeman.”
Showing confidence in Ganesh, Tata AMC's chairman F N Subedar said at the time of appointment: “The company is going through an interesting growth phase and Ganesh's appointment comes at the opportune time. His ability to lead high performing teams to the next level of excellence and growth will benefit our organisation.”
When asked where he would like to see Tata AMC five years down the line, Ganesh says, “Every investor should think about Tata Mutual Fund before investing.”
CLARIFICATION
An earlier version of this article misstated Tata Mutual Fund's anniversary in the opening paragraph. And also in the graphics, the fund was shown as registered in 1994 which is not the correct year. It was registerd in 1995. The correction has been made and error is regretted.
