The newly appointed MD & CEO of IDBI MF, Debasish Mallick discusses the challenges that lie ahead with Jayshree Pyasi and Ravi Samalad.
You have taken over as MD & CEO at a very interesting juncture of the industry. How do you see the industry?
I have spent just three months in the industry. Prior to this, I was the head of IDBI Bank’s personal banking business where my exposure to mutual fund was limited to overseeing distribution of third party MF. If being green was not challenging enough then taking charge of IDBI MF when the MF industry is under a stress has made it a formidable task for me.
In spite of these challenges the industry has been welcoming and most of my peers have helped me to understand the dynamics of the business.
How has IDBI fared so far as a fund house?
In spite of being a new entrant, IDBI has been able to rise to the challenge. We ended the first year of operations with an AUM of Rs. 3,000 crore. At present our AUM is Rs. 5,124 crore.
What is your AUM target this year?
By the end of 2011 we are looking at a target of Rs 7,000 crore. It is a formidable target but the team is confident of reaching this milestone.
Would IDBI’s focus continue to be on passive funds or would you launch active funds also?
We are open to launching active funds. We are looking into diversifying our product lineup and would soon be launching active funds in equity and debt fund category.
What is IDBI MF’s distribution strategy?
Besides the extensive network of 816 IDBI branches, we have 3,700 IFAs empanelled with us. In future, we plan to tie up with even more IFAs.
What are the priorities that you have set for IDBI MF?
The priority of the fund house as a whole is to reach out to all types of investors and not just rely on its banking partner to get retail clients.
What new trends do you see in the industry?
In the current scenario, active funds with good fund managers have been able to perform well. With more disclosures and better corporate governance, the playground will be leveled. And with the same amount of information available it would be increasingly difficult for one fund manager to outperform another.
Over a period of time the gap in the returns of index funds and active funds will narrow.
What would be your advice to IFAs?
Indians haven’t woken up to the merits of passive funds. My advice for any investor and advisor is to keep at least one passive fund in their portfolio as these products have a low expense ratio and in choosing an index fund, go for the one that has the lowest tracking error.
