Mumbai: The churn among fund managers in the Rs17 trillion India mutual funds industry continues. Gopal Agrawal, chief investment officer, Mirae Asset Global Investments (India) Ltd has left the fund house.
Agrawal could be joining Tata Asset Management, a person familiar with the matter said. Agrawal said he is in talks with a few mutual fund houses but didn’t confirm talks with any specific fund.
Neelesh Surana, who joined the fund house in 2008 and is the chef investment officer-equity, will continue to head the equities division at Mirae Asset , said Swarup Anand Mohanty, chief executive officer, Mirae Asset Global Investments (India) Ltd.
Although Mirae Asset India ranks just 26th in terms of its overall assets under management (Rs6,343 crore), the fund house has come back from the verge of collapse. In 2008, due the global credit crisis, debt funds across the Indian mutual funds industry made losses. When investors rushed for redemptions, particularly from debt funds, these schemes sold their underlying securities at throwaway prices to generate whatever cash they could. Since debt markets in India are highly illiquid, many sponsors of fund houses or fund houses themselves bought out securities from their own debt funds at face value and funded the schemes’ losses.
Mirae Asset AMC was an exception. Neither the sponsors nor the local AMC bought any of the scrips that were a part of Mirae’s debt schemes. When Mirae finally took a stand to not to absorb losses on its books and instead pass them onto investors, it retained the spirit of what a mutual fund is all about. But it paid a heavy price. It’s AUM fell to about Rs199 crore in just three months, from about Rs2,500 crore as on September 2008-end.
Therein started a long climb for Mirae Asset. In an industry that has been obsessed with launching multiple funds and gathering assets, Mirae Asset refused to crowd its product bouquet and stuck to a single scheme in whichever categories it entered. Agrawal, meanwhile, focused on the fund performance and the equity schemes quietly worked their way up. Its flagship fund, Mirae Asset India Opportunities Fund returned 50% and 20% over the past 8-year and 5-year periods. Mirae Asset Emerging Bluechip Fund (MAEB), its mid-cap offering, returned 30% over the past 5-year period. Infact MAEB, which was launched in May 2010 and a little over a year after its Mirae Asset’s 2008-09 crisis, had collected only Rs20 crore during its new fund offer period. Today, it’s corpus is little over Rs3,000 crore. In October 2016, MAEB stopped accepting fresh money through lump sum amounts and limited new systematic investment plans to Rs25,000 per Permanent Account Number. Both these schemes have been a part of Mint50 curated of 50 investment worthy mutual fund schemes that we recommend to our readers) for a long time.
“The 2008-09 period was the toughest challenge of my life. My team was on the verge of disintegration. I knew that Mirae Asset had to succeed, because if it succeeds, I would succeed”, said Agrawal.
Roughly 85% of Mirae’s corpus lie in equity schemes; amongst the highest equity allocation in the mutual funds industry.
But will Mirae continue its policy of not launching too many funds? “Mirae will stick to its policy of being one fund per category. We will launch a fund only if we feel we have the capability of managing it. We have no desire of launching funds to complete categories”, said Mohanty