SBI MF has crossed an AuM level of Rs.825,000 crs – a level which our entire industry’s AuM was just 9 years ago! This remarkable decadal growth of the industry leader has seen it scale to a massive 20% market share and entry now into the 100 billion dollars AuM club – India’s only asset manager so far to enter this coveted global league.
Business ethics and customer-centricity are the two key pillars of SBI MF’s stupendous success, says DP Singh, as he and his team chart out their next priority of scaling the Rs.10 lakh cr AuM mark.
SBI MF is excited to see Jio entering the MF industry. Jio will bring its own thought processes on innovation into an industry that’s anyway innovating every day. Any innovations and market expansion efforts by any player are always welcome.
There are many Bharats within our Bharat – diverse investor segments, diverse needs. Each AMC and distributor must focus on the segment that plays to their strengths the most. There is more than enough space for all participants in an industry that is as yet in low single digits in terms of market penetration.
DP does not see the advent of new passive focused players creating any major disruption to active funds. MF costs in India are already among the cheapest in the world – in active as well as passive segments. Cost is unlikely to be the sole criterion for investors – right solutions for their specific needs is what is likely to determine fund choice. This is where MFDs play a vital role – they have many more opportunities ahead of them from market expansion rather than threats from passives overtaking active funds.
DP believes that MFDs should focus more on longevity and less on liquidity. Over-selling the liquidity aspect of funds leads to short-term mindset. We need to sell longevity – we need to sell the benefit of remaining invested for the long term, we need to sell solutions that enable such behaviour – like childrens benefit funds, retirement funds, multi asset funds and the entire range of hybrid funds.
MFDs should build at least 25% of their AuM in longevity focused solutions – this will not only serve their investors well, but will also give lot more visibility of income to pay for fixed costs. Income from rest of AuM should be profits for the MFD. De-risk your business model in this win-win manner, says DP.
SBI MF is playing a key industry catalyzing role in the debt funds space with two key initiatives – the first involves resolving the biggest debacle (FT’s would up schemes) and the second to ensure that no such debacle recurs.
Progress on collecting all dues owed to FT’s would up schemes has been phenomenal – all but 130 crs out of a huge 25,000+crs has been collected and returned to anxious investors of those schemes, through SBI MF’s relentless efforts.
To prevent such instances from recurring, MoF and SEBI have launched the Corporate Debt Market Development Fund (CDMDF) which will serve as a backstop for any debt fund facing a liquidity crisis in a market dislocation. This will be managed by SBI MF, on behalf of the industry.