The smallest story can sometimes have the biggest impact.
In 2017, a few months after joining as CEO, I made a routine visit to one of our branches (may I remind you that this was pre-Covid times, when domestic travel was normal!). My colleague had set up an evening event for which we expected 25 distributors to turn up. Exactly three did.
I was obviously upset. When I mentioned this to a colleague back in Mumbai, he promptly told me, “This happens when you run a small AMC.” This was the first in a line of many incidents to remind me that we were a “small AMC”. I had never expected this job to be a cakewalk, but this constant “small AMC” reminder wasn’t easy. My team individually experienced their own versions of this.
I’ve always read that young blood is hungry and foolish, and the good part of building from Ground Zero is that you can think audaciously, almost foolishly large. When we had 10,000 folios, we dreamt of 5 lakh folios, when we had Rs 5,000 crores of assets, we talked about Rs 40,000. With just Rs 250 crores in Edelweiss Absolute Return Fund (now Edelweiss Balanced Advantage Fund) that was bleeding assets every month, we dreamt of Rs 5,000 crores.
Was there any logical base for these numbers? No. Was any excel Kung-Fu to justify them? No.
But there was a desire for growth that energized us when the stories pulled us down. When we built our new office, we erected a “Growth Wall” at the entrance, a set of bright blue blocks spelling GROWTH with plants growing over them.
And though we are still in the early days of this growth journey, here’s what we have learnt.
The magic of the misfit.
A product and marketing head who has never done marketing before. An institutional and retail sales head who has not led at a national level before. A chief operating officer who is 15 years younger than her counterparts, and comes from an alternatives product background. A Mumbai head who has never run a team, or ever lived in Mumbai.
What started by chance, has now become a conscious choice. A significant part of our leadership is now an “outlier” or “misfit”. These are people who come without baggage but loads of hunger; they far make up in energy, what they lack in years of experience.
Our largest equity fund today is managed by two young completely home-grown fund managers, and if asset management is going to change, so is the colour of people in asset management firms.
Abnormal is good.
We have often heard that mutual funds are commoditized products since scheme categories are well-defined and there are no barriers to replicating what someone else has. While this is true in part, we do believe, that even within this paradigm, we do not have to be a copy of everyone else.
In the early days of scaling Edelweiss Balanced Advantage Fund, we saw a lot of resistance because BAFs in the market largely followed the P/E based approach, and ours uses momentum. P/E is an easy sell, “buying low and selling high” intuitively makes sense, and while it is a good approach, momentum is an equally valid one. We learned to first accept that internally and then communicate that externally (pro-cyclical vs. counter-cyclical funds). Even though we occasionally get a random comment about Edelweiss Balanced Advantage Fund not being a “normal BAF”, we have learned that abnormal can be good.
Just be there.
I dislike the word innovative – even though it has been used for some of our funds, because innovation means complexity. Financial products should solve problems for consumers in as simple a way as possible. We should be useful, and we will be useful when we believe that the customers are the sun we revolve around.
I keep telling our team that we are lucky to grow up in a world where social media has democratized access to partners and investors, and we don’t need to rely on huge ad budgets and big print spends to tell our story or hear their feedback. The primary reason for the team being active on social media is it gives us the ability to connect with investors; I joke that I can diagnose if there is a problem in our funds or operations, by the number of queries that hit our Twitter handles. We are often asked why we answer every investor query quickly or communicate aggressively when even an international fund has a drawdown. Our belief is that we are lucky to have the medium to do so, and just happen to be using it.
Chappal Ghisso
I cannot think of the anglicized version of these two words, and frankly, I don’t know if the English equivalent can convey the emotion behind them. It literally means to wear out your shoes.
In the early days, when we were asked what our edge would be, my boss quipped, “Hum chappal zyaada ghissenge.” We will just work harder than the next guy. It sounds really basic in boardrooms when you discuss strategy, but it makes a lot of sense. You cannot control the fact that you don’t have a bank to support your distribution efforts and it does mean that you cannot do huge NFOs. But nothing stops you from building the business gradually, MFD by MFD, SIP by SIP. Nothing stops you from running existing funds well, and growing them, bit by bit.
Sometimes, constraints are also friends of creativity. When you have small marketing budgets, you will scratch your brain harder to make content the hero; our much-liked topicals are a product of these constraints.
Well…
As I write this in 2021, the AMC crossed those 40K and 5L folio milestones some time ago, and last week, Edelweiss Balanced Advantage Fund did hit 5K. When it did, Bhavesh Jain, the co-fund manager of the fund, joked that it was funny that this happened in four years, because when he and I spoke about a 5K Edelweiss Balanced Advantage Fund in 2017, it felt like a retirement plan. It was such a moon shot away.
Among the many good wishes we received when this happened, my favourite came from an MFD who wrote that we had done a good job educating the market about different kinds of BAFs. It re-iterated something that I really believe: in this crowded world, you have the power to write your own story and shape your own narrative, and when you do it with conviction, you will find listeners.
So are we still called a “small AMC”? Honestly, we aren’t bothered. We just continue to write our own story, and we do it with sincerity.
And oh, the word retirement is FAR away, unless it is in a fund.
Thank you for reading.
Radhika Gupta, MD & CEO, Edelweiss Asset Management Limited
The views expressed are those of the author and not necessarily the organization she represents. The funds mentioned are not recommendations.