The SIP champions

Read on to find out how Vinod Jain and Rajesh Jha built 600 crore AUM in mutual funds.
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By Ravi Samalad |  14-02-17 | 
 
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About the Author
Ravi Samalad is Assistant Manager - Editoral for Morningstar.in.

Nestled in a quiet lane in Mumbai’s suburban Andheri, Vinod Jain & Rajesh Jha’s office is situated on the ground floor of an old housing society which can be easily missed. Founded by Jain in 2001 after quitting his job at NSE, Jain Investment Planner today is a distribution powerhouse serving 8,500 clients with assets under advisory of Rs. 600 crore in mutual funds.

Clad in a black t-shirt and denim jeans, Jain dashes into his cabin and switches on his computer to check the market’s mood while sipping on green tea. After a quick chat, we move to another room in his office where he conducts trainings for this staff every Friday. Jain says that he has completed 1,800 hours of training for his staff so far. Today he is speaking on how his team should avoid recommending funds which have become suddenly popular due to short term success. After a lively three-hour interactive session, we are back in his cabin discussing his journey in financial advisory.

Grown up in Mumbai, Jain used to teach in colleges and train CA students during his early days. He combined his passion for teaching with his number crunching skills to chart his success.

The entrepreneurial bug

Jain got the inspiration of becoming an adviser after Rajesh Jha, ex-colleague and now his business partner, sought his advice to invest his bonus. After his practice took off in four years, Jain asked Jha to join his fledgling venture.

A chartered accountant rank holder, Jain has replicated a successful sub-broking model popularly known as broker-dealer agreement in US here in India. When he started out in 2001, he hired a fresh MBA pass-out and gave him a target of generating Rs. 10 lakh SIP book in four years. The RM still works with him and his MF book has now grown to Rs. 95 crore! Jain kept appointing RMs and gave them the same mandate. Today, his army of 45 advisers bring in fresh SIP flows of Rs. 20 lakh a month. His SIP book is Rs. 5.20 crore spread over  9,000 SIPs.

He consciously avoids appointing people with prior MF experience which allows him to train them according to his ‘method of selling SIPs’. Vinod is a firm believer of the wonders of SIP. He shares one such client success story. “I have a client who started a SIP of Rs. 10,000 a month ten years back. He increased his investments as his income grew. Today, his portfolio is worth Rs. 8 crore,” says Jain.

The turning point

The entry load ban came as a jolt. Although they had sizeable assets under advisory, serving a large retail client base on a small ticket size posed a challenge. The only way out was to prune their clientele and increase their minimum ticket size per client. They started looking out for clients who could invest a lump sum of Rs. 5 lakh or commit a SIP of Rs. 10,000 a month. With this strategy, their average SIP ticket size has now grown to Rs. 6,200 which they aim to increase to Rs. 10,000 going ahead.

SEBI’s game-changing rule also made them diversify their sources of income. Since Jain has been investing in markets since the age of 19, he decided to put his experience into practice by launching a PMS called India Equity Fund in 2010. Their PMS has now grown to Rs. 350 crore size fund across 330 clients. Around 30% of their revenues comes from this PMS.

Global footprint

The duo found that there was no offshore fund which could give exposure to India’s mid cap sector to foreign investors. They decided to fill this gap by floating an offshore India focused fund. Registered in Singapore, their Assetica India Equity Fund today manages assets worth Rs. 35 crore. The fund is sold by six international banks which gets investors from Germany, UK, US, Canada, Dubai and Thailand.

Jain’s partner Rajesh Jha has been marketing this fund in offshore markets. In fact, Jha had moved to Singapore with his family to prospect foreign clients. “Our partner Rajesh moved to Singapore in 2011 and got in touch with a lot of family offices. Through references, we made inroads into countries like Germany, Britain, US and Canada. Today, we have offices in Singapore, London, UAE and Canada to oversee our global operations,” says Jain.

Through word-of-mouth, it took Jha close to two years to acquire the first set of clients for this fund. After establishing a foothold in Singapore in three years, Jha has now moved back to India. He looks after the firm’s global operations from India and keeps hopping to their overseas offices.

Encouraged by the success of PMS and offshore fund, they are now mulling to launch an equity alternate asset fund (AIF).

Technology

The duo has floated a technology firm which is automating their processes and help them scale up. Jain and Rajesh have invested  Rs. 1 crore in this company so far and plan to invest Rs. 2 crore in the next two years. They have given an equity stake to the person who is driving this vertical. Indeed, such an initiative is revolutionary and unheard of in the advisory space, at least in India. And their investment is paying off. Jain says that 75% of their transactions are paperless.

When asked what is his secret sauce, Jain says that client confidence in his advice, great employees and technology is his recipe for success.

How he caught our eye: Advises Rs. 600 crore assets in mutual funds with 8,500 clients. Manages his own PMS - India Equity Fund with Rs. 350 crore assets. Launched an India focused offshore fund called Assetica Fund registered in Singapore.

Favorite book: Common Stock and Uncommon Profits by Philip Fisher. Other favorite reading is Mark Twain’s quotes.

Personal: Married to Sheetal and has two daughters. Enjoys playing badminton.

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