At a time when there are over 40 mutual fund houses in the country vying for investor attention and their savings, and a set of new fund managers are entering the tightly-regulated arena, what will it take for new players to create a niche for themselves.
Differentiated products, distribution support and the use of technology, believes Ganesh Mohan, CEO of Bajaj Finserv AMC, a recent entrant in the Indian mutual fund industry.
The Pune-based fund house uses a lot of technology to differentiate itself from others, especially in its investment strategies as well.
“We use technology to differentiate as well. In this investment driven industry with over 40 established players, any unique selling point must focus on investment strategies,” says Mohan who prior to joining the Bajaj Finserv group was a partner with Boston Consulting Group having worked with them for 16 years across US, Europe, Middle East and India.
“I would say for new AMCs particularly it is very important. When you do not have much of a track record in this business, and you are trying to build scale and relevance, having both differentiated products as well as the support of distribution is critical to be able to build the business,” he adds.
Interestingly, as part of its own set of differentiations, Bajaj Finserv Asset Management Company has come out with an investment philosophy based on InQuBe, which is the AMC’s proprietary framework that adds a layer of behavioral finance to the informational and quantitative edges.
By doing this, the fund house seeks to eliminate behavioural biases in investment decision-making and believes this approach is capable of generating alpha consistently when measured over the long term.
Data from Value Research, a mutual fund tracking firm, shows that the fund house had assets under management (AUM) totalling ₹6,877.53 crore as on December 31, 2023.
In a recent presentation, Bajaj Finserv AMC had highlighted the fact that mutual fund AUM surged by 3-4 times in countries like Malaysia and Thailand when their respective GDPs doubled in 10-15 years.
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