Almost six months back, Kenneth Andrade left IDFC AMC. We decided to catch up with him to learn what’s keeping him busy.
He selected the perfect location right in the heart of Bandra, a beautiful rustic café known as Bird Song Café for this meeting. When you enter the café you hear music of the 60s and the 70s along with smell of coffee and chocolate. Kenneth knew how to make the perfect entrance in his small cute red electric car.
The café was quiet and not so crowded which made it a perfect place to for this interview. The staff was friendly and understanding as they chose not to disturb unless they were asked.
After exchange of pleasantries and explaining the agenda of this meeting we sat down and started our interview.
Hailed as the ‘Midcap Mogul’ by Forbes magazine, Kenneth started his journey in the world of investment when he was just 16-17 years old. His formal training started when he joined Capital Market magazine as an analyst where the tracked the IPO market, which was very vibrant back then.
In the early phase of his career, he worked under the likes of Chetan Shah at Capital Market and Bharat Shah at Apple Asset Management who introduced him to what organized equity research was all about. This experience contributed immensely to his career.
When asked what helped him to get where he is today, he says that the period of 90s helped him learn a great deal about markets. The Indian economy was volatile. We were reeling under the Harshad Mehta scam. That era saw multiple events (globalization, Asian crisis, tech bubble) which served as great learning experience for Kenneth. “All these events sharpened my skills. I learnt what exactly to look for in a company. It was a rich experience for me and I don’t think it can be replicated,” recalls Kenneth.
In early 2000, Kenenth worked under Vetri Subramaniam, currently the CIO of Invesco MF. Vetri helped Kenneth apply his number crunching ability to better use.
So while he ordered Latte for himself and Jasmine herb tea for our correspondent, we asked him a question that almost everyone has given a thought, what does it take to be a successful fund manager?
According to him, everyone has different strengths and qualities but for him it is determination and patience. He believes that one needs to have conviction and patience to hold investments for long term. “My typical investing style is to buy the business. If I need to hold a company for a particular tenure, I analyze the company through a life cycle,” explains Kenneth.
When asked to share his advice for budding fund managers, he says that today’s generation needs to learn to be patient.
While work experience helps, how important is education in becoming a successful fund manager? Kenneth is an exception in the bunch of fund managers who generally are IITians, IIM, CAs, etc. “I am the exception not the rule. Education is essential if you want to get an early start in field of investing. While education is important, I don’t think it can be a hindrance for your career as long as you are passionate and knowledgeable.”
“Kids today aspire to become fund managers at the age of 30 when they haven’t even seen one entire life cycle,” chuckles Kenneth.
This discussion led to an interesting conversation on the unemployment rate in India. Kenneth predicts that the urban wage rate will become stagnant in the near future. He says that the unemployment rate is largely understated in today’s context. “In India, currently only 25-27% of women are formally employed. As the wage hikes gets stagnant and inflation increases, women will be pushed to apply for jobs. That way urban family incomes would continue to rise while per capita incomes would stagnate.”
He added that there will be around 1.6 billion youngsters in India by 2050 and our country needs to cater to all of them which can be a huge challenge.
Market and other talks
Since as we were interviewing Kenneth, not asking about markets would be a crime!
He feels that it is a good time to invest now. According to him, we are out of the bear market. India entered the bear market in 2011, that’s when the profits had actually become stagnant. Profits have not been growing since 2011. Now, he says that the worst is behind us. “But I am not a macro guy so I don’t know how our economy will react to liquidity tightening,” admits Kenneth.
Further, we discussed his views on how fund managers avoid being labelled as value or growth investors in India. He says, “It isn’t that fund managers in India don’t have an investing style or they run away from labels. In fact, I know many who proudly announce their investing style. It’s just that our market is very young and we are still evolving.”
When asked him about his future plans, he said he will return to managing funds soon. But for now, all he plans to do is travel and meet people and learn. Just like he has been doing from the last six months.
