Mutual Admiration

It was an evening where the term mutual admiration took on an all-new meaning. An evening when everyone who’s someone in the mutual fund business gathered, well ahead of the appointed time, to raise a toast to the best performing funds and best fund managers. Even the honorable Corporate and Minority Affairs Minister Salman Khurshid kept his date with Businessworld despite an eventful day at Parliament that was fiercely debating the Women’s Reservation Bill.

 

It was a day when money was probably not the first thing on the minds of the money managers. Rather, other things such as how do they rank among their peers, will they leave the five star with a stash of awards and other such thoughts could have coloured their dreams as they converged in the pre-event area to network with their industry peers.

 

The evening began on a reflective mood, looking at how far the industry had come in a short span of 10 years, from one UTI to 37 players and from Rs 1,08,000 crore to Rs 7,60,000 crore in assets under management. There were also gentle reminders to the expert money managers in the audience, that it took several years of consistency to prove one’s skill. 

 

Ted Aronson, one of the best money managers in the US, was recalled for his quote that it takes anything between 20 and 800 years of monitoring performance to prove that a money manager is skilful, not just lucky. 

 

And it was in the same context of long-term performance that Businessworld and its knowledge partner Value Research decided on the winners of the Businessworld Best Mutual Fund Awards.

 

Joseph Massey, managing director and CEO of India’s new stock exchange MCX Stock Exchange (MCX SX), said that even as the mutual fund industry had grown at a frenetic pace in the recent past, the picture will radically change over the next five years. Massey exhorted the enthusiastic gathering to take the investment culture deeper to smaller towns — a move that would pay rich dividends for the entire industry.

 

In his keynote address, Khurshid delved on the fact that the huge level of savings by Indians is unheard of in developing countries — a fact that the money managers could take advantage of. He exhorted the audience: “We have to get out of our drawing rooms and move aggressively into rural India.” Unless growth is inclusive, there is a danger that mutual funds may remain a ‘drawing room industry’, Khurshid emphasised.

 

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The minister went on to add that a huge transformation was happening in rural India through mobile telephony, a vehicle on which the investment culture could ride. “However, we should not be patronising in our approach to rural markets,” he said, and pointed to the way the government in the liberalised era is following a similar hands-off approach to the mutual funds industry, where it facilitates business and allows the investors and shareholders to decide. “This (approach) encourages dialogue and will demonstrate India’s maturity as a financial and industrial democracy,” he said. 

Khurshid also elaborated that the industry and government relationship was akin to that of a father and a son who was attaining adulthood. “This is the time when you doff your hat and encourage someone showing signs of adulthood. It is a brilliant validation that child is the father of man,” he said.

 

As if on cue, it was time to doff hats to the winners in a year that saw the industry bounce back after a disastrous 2008. 

 

Reliance Mutual Fund got the maximum applause, with five awards including that of the Best Asset Management Company (AMC) being picked up by the fund. Other awards picked up by Reliance Mutual were in the categories of Long-term leader, Equity multicap, Hybrid equity-oriented and Debt short-term income funds.

 

The Smartest Fund Manager of the year award was conferred on Kenneth Andrade for IDFC Premier Equity Plan A, while the Best Turnaround Manager title went to Mohit Mirchandani of Taurus Infrastructure Fund. Taurus’s second award came from Taurus Tax Shield in the Equity tax-planning category. Birla Sun Life also grabbed two awards, while UTI, Canara Robeco, Sahara and DSP BlackRock picked up one award each.

 

The audience cheered the winners irrespective of which AMC they belonged to. Most probably because, as MCX SX’s Massey remarked, it was not just the winners, but the entire industry was a winner. The presenting sponsor of the awards was MCX Stock Exchange. Whyte and Mackay partnered the event, while Bloomberg UTV was the television partner.

 

(This story was published in Businessworld Issue Dated 22-03-2010)