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Mirae Asset pleasantly surprised the industry by growing its asset under management by 100 times to ₹1 lakh crore from ₹1,000 crore in a matter of five years. Though the market rally had played a role, investors had recognised the fund house for its consistent performance. Swarup Mohanty, Chief Executive Officer, Mirae Asset Investment Managers shares his thoughts with BusinessLine. Excerpt:
What is the role of recent market rally in Mirae achieving ₹1 lakh cr AUM mark?
The AUM is a factor of market valuation. When markets are on a roll like the times we are in, there is bound to be a decent market action looking at our equity heavy base. This year has been good for us in terms of attracting new investor inflows. In spite of not having a large active NFO, we are ranked among top AMC when it comes to net inflow of money in the industry. This is due to consistent fund performance and trust of investors in us.
Do you expect the rally in market continue?
After a strong performance in the last few quarters, one can expect some breather in the short term. Historically, we have seen that the markets generally are a leading indicator and recent rally clearly implies expectations of a strong earnings growth. Moreover, India’s medium to long term growth prospects looks good on the back of low interest rates, supportive government policies and positive global macros. Reforms such as GST, RERA, labour laws and recent focus on manufacturing exports are long term positive factors. The Nifty Index is reasonably valued at 18 times of FY24 earnings and in the backdrop of earnings CAGR of 22 per cent between FY’20 and FY’24.
How many millionaire has Mirae made in its journey of achieving the milestone of ₹1 lakh crore?
As an asset manager, we have this unique privilege to partner in the wealth creation journey of our investors. Remaining consistent to our investment mandate and process is the key. The outcome of this is the amount of wealth which investors create from our funds. We are conscious of the fact that investor entrusts us with their hard-earned money and our endeavour is to safeguard that trust. We always aspire to keep our funds true to label and provide consistent returns. As a result, what was a ₹1,000 crore fund house in 2016 and is now an AUM of ₹1 lakh crore.
Most of the foreign mutual fund houses have not seen much success in India. What has worked for Mirae to achieve the ₹1 lakh crore mark?
Mirae Asset India is lucky to have a promoter who had the patience that was required for the business in its initial years. The India business has the freedom to chart its business plan at its own pace. Every country is unique and the business environment of that country needs to be respected. Mirae Asset followed this not only in India, but also in every country it operates in. That is the differentiating factor. We started our business in 2008 in the backdrop of the global financial crisis. Post the crisis it took us till 2013 to cross the first ₹1,000 crore AUM. It is this resilience to be at the business put us on the right track. Today we believe we have built a good platform for all our future business endeavours.
Do you believe new entrants into mutual funds will eat into market share of existing players especially in top 30 cities?
It is always good to have new entrants. It shows the growing conviction on Asset Management as a business and its prospects in India. They get the benefit of hindsight and the business track record helps them build good business plan. They bring new options which is good in investor’s perspective. The industry’s penetration is low and there is space for all. It is not the time to worry about market share. Anyone who can kindle the investing habit in financial assets should be welcomed.