How Rajesh Bansal built Rs 600 crore AUA in 6 years

By Ravi Samalad |  27-11-21 | 

Rajesh Bansal started his career in financial services in 1993 with a merchant bank. In his second stint, he joined a private sector AMC, where he was responsible for heading its sales in the north region. Rajesh also worked with IFAN (Independent Financial Associates Network), which is one of India’s earliest B2B platforms for distributors.

Entrepreneurial plunge

Rajesh struck out on his own by forming Midas Finserve in 2015. In his career spanning 26 years, Rajesh has interacted with a lot of clients and provided them guidance and handholding. So when Rajesh started his practice, many of them were happy to invest through him. Rajesh made sure he set up proper processes and back-office support so that clients have a smooth experience while onboarding.

Invest in yourself

Rajesh believes that offering research-based advice will differentiate MFDs/advisers in this competitive market.  Rajesh invests a lot of time and money in upgrading himself by keeping abreast with the markets, economy and gaining technical knowledge to offer sound advice to his clients. He is a trained technical analyst and keeps a hawk’s eye on markets around the world.

“Timing the market is difficult but sometimes it helps. We invest a lot of time in studying companies and markets. This helps us in picking the right funds which are positioned to take advantage of short-term and long-term trends. I would recommend all MFDs/advisers to invest time and money in acquiring knowledge,” says Rajesh.

No wonder then his company’s assets under advisory grew to Rs 100 crore in just six months! So far, his firm manages AUA of over Rs 600 crore across products, majorly in mutual funds.

His firm caters to 1,700 families. Its clientele spans retail, HNI, UHNIs and corporates. Midas has a team of 15, operating from Delhi’s Barakhamba area.

Active advice

Midas has developed its in-house model which tracks 72 parameters to see the direction of markets while selecting schemes and making asset allocation. His model recently suggested reducing equity exposure. When the markets were at their peak, Rajesh recommend many of his clients to book profits. His advice to investors is that they should always maintain asset allocation and don’t worry about volatility.

Rajesh believes that every sector has its own expansion and contraction cycle. Currently, he is bullish on PSUs, services and real estate themes. “Services sector saw a good run from 2003 to 2013. It is looking up right now. The economy is in expansion mode and the real estate theme will benefit. During the pandemic, people have been confined in their homes. People realised that they need bigger houses if both husband-wife are working from home and even kids have to attend online classes. Thus, people are spending on home improvement. Before covid, the home was just meant for spending the night after daylong work and commute. Now, people need bigger houses,” observes Rajesh.

He also believes that banking and infrastructure will be big beneficiaries of the revival of the economy. “The loan problems are behind us. It is unlikely that more NPAs will emerge which will lead to higher profitability. The banking and infrastructure sector has not participated in a big way in this bull run. Also, digital and IT is a multi-year theme.”

When most advisers would shy away from recommending sector/thematic funds, Rajesh says that timely entry and exit from sectors can help clients get lumpy returns, if played well. “Even sectoral calls help sometimes. We recommended IT and pharma. It helped our clients reach their financial goals a little early.  Banking can be another sector to make wealth right now.”

He believes that Business Cycle Funds can be a good way to participate in turnaround stories. “These funds concentrate on just four to five sectors. The business cycle is a broader theme. Fund managers have the leeway to move across market capitalisation and sectors. A focused approach on few sectors benefits such funds.”

When asked about his view on the emerging trends in the industry, Rajesh says that novice investors who don’t understand the intricacies of the market and don’t wish to active advice can invest in passive funds. He believes that active funds still have a lot of room to generate alpha for a foreseeable future.

Rajesh is optimistic about the prospects of ESG funds because it is a global trend and not just a fad. He feels that companies will strive to improve their ESG score which will attract more investors to such companies.

Road ahead

Having achieved a remarkable milestone of Rs 600 crore AUA in just six years, Rajesh is now exploring to grow his firm through the inorganic route. He observes that many IFAs who have painstakingly built their business over the years have not put in place a proper succession plan.

“Some IFAs want to retire but don’t want to lose the years of their hard work. Their next generation doesn’t want to take up the reins of the business. We give them an exit and at the same time helping their clients have a smooth transition. We are supporting them through research, technology, back-office and other areas.”

Going ahead, Rajesh plans to expand the scope of his company's services by taking up the RIA license.

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