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Business News/ Mint-lounge / Features/  Leo Puri: The accidental manager
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Leo Puri: The accidental manager

The head of UTI Asset Management has had an eventful work life. But did it prepare him to run a young company with an old soul?

Puri believes the slide which began in 2011 has been arrested. Photo: Sameer Joshi/MintPremium
Puri believes the slide which began in 2011 has been arrested. Photo: Sameer Joshi/Mint

In the summer of 2012, Leo Puri went trekking to the Mount Everest Base Camp with his wife and teenage children. But climbing up to 5,364m in Nepal is perhaps not as tough as his current job: managing director of UTI Asset Management Co. Ltd (UTI AMC), a 12-year-old company with the soul of a 51-year old institution.

Regulated by the Securities and Exchange Board of India (Sebi), UTI AMC now operates under the Companies Act. The government holds the majority stake of 74% through four sponsors, all public sector institutions, but it is not a government enterprise. It is a schizophrenic entity—on the one hand, it has an institutional legacy and memory; on the other, it is a relatively new entrant which is still finding its identity in the professional asset management space. Born out of a repeal of the UTI Act in 2001, this is UTI’s second life.

We are at Oh! Calcutta at Mumbai’s Tardeo. Puri hasn’t chosen the restaurant, known for its Bengali cuisine, because I am a Bengali. Born in Kolkata, he loves Bengali food. His father used to work for Metal Box India Ltd, a blue-chip British multinational packaging company, which eventually succumbed to the politics of labour in Left-Front ruled Bengal. Puri studied till class V at St Xavier’s Collegiate School in Kolkata before moving to Mayo College, a boys-only independent boarding school in Ajmer, Rajasthan. He vividly remembers his Kolkata days, playing hockey with Armenian, Chinese and Anglo-Indian school friends.

His parents had come from Lahore to Kolkata after independence. His paternal grandfather was a professor of zoology at the Government College University in Lahore, and his butterfly collection, says Puri, is still preserved there.

Illustration: Jayachandran/Mint
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Illustration: Jayachandran/Mint

First, the Union finance minister at the time was strongly in favour of an IAS officer for that post. Once the minister changed, the officer was pushed out of the race, but Puri’s academic background didn’t exactly match what the UTI management was looking for.

“There is always an element of accident in my career—I don’t plan it," Puri, 53, says, nibbling on Kakra Chingri Bhapa (steamed crab meat and shrimps with mustard and chillies) as a starter. To wash it down, we order a fresh ginger-mango-orange drink. For the main course, Puri’s preferences are chorchori (a mix of leafy vegetables) and Kolkata bekti with mustard and steamed rice.

His first love was the civil services. After graduating from Oxford, Puri sought the permission of then prime minister Indira Gandhi to take the IAS exam at the Indian high commission in London, but he did not get it. Then he wanted to become a lawyer. With a postgraduate degree from Cambridge, Puri’s enrolment as a member of the Bar Council of India was automatic, but his stint at law firm JB Dadachanji & Co. in New Delhi did not last beyond a few months. He was convinced he couldn’t make a decent living from the legal profession. “The legal profession was a cottage industry then and you needed to be the son or nephew of an eminent lawyer to get it going for you. The firm even forgot to pay me for a few months," Puri recollects.

Leo Puri doesn’t read business or management books; he reads history and political biographies. Currently, he is reading ‘Lives of Others’ by Neel Mukherjee. He enjoys Western classical music and theatre. Recently, he saw ‘The Curious Incident Of The Dog In The Night-Time’ and ‘Behind the Beautiful Forevers’—both National Theatre, UK, productions. An avid sportsman in school, he used to play hockey till the university level; now he plays golf. He loves holidaying with family, trekking, visiting historical sites, and going on safaris.

I remind him that UTI AMC has lost substantial market share and been pushed to the fifth position in the 10.96 trillion Indian asset management industry, with just about an 8% market share. Puri says the slide, which began in 2011, has been arrested: “We are the third most profitable asset manager with 9.56 million investor accounts—one-fourth of the total investor base."

UTI is also the most overstaffed asset manager, with 1,300 employees and trade unions—an employees’ union as well as an unrecognized officers’ union. Puri admits that human resources (HR) is a challenge but believes it’s not insurmountable. “We are professionalizing a bureaucracy. Yes, we have more people on the payroll than we need but I have no plan to get rid of them; once the business grows, their presence will be justified," he says, somewhat diplomatically. He has made two key appointments—head of HR and sales and marketing—and has created his top team. The salary structure is being reworked and made market-driven to attract talent.

The strength of UTI, according to him, lies in that it’s the largest independent asset manager, not promoted by a financial institution or a corporate entity, and this allows him to take decisions on asset allocation without fear or favour. But it is an orphan. The Life Insurance Corp. of India, State Bank of India, Bank of Baroda and Punjab National Bank are reluctant sponsors. After the repeal of the UTI Act, when the organization was restructured, they walked in on behalf of the government, but they have never been interested in running the show—they have their own asset management companies. There is also a clear conflict of interest, for Sebi norms do not allow one entity to be involved in running more than one asset management company.

Indeed, the US-based global investment management firm T Rowe Price holds a 26% stake in UTI AMC and has board representation, but clearly it cannot do much without the support of the sponsors. The fact that it took more than two years to get a CEO after Sinha left is a testimony to this.

Puri agrees. “We don’t have the culture of governance, say, like Singapore. In some sense, we work with one hand tied behind our back. We need to have a debate on the limits of reforms under public ownership," he says. The solution, according to him, is going public and making UTI AMC a widely held institution. He says he has submitted a proposal to the government, but doesn’t seem optimistic about it happening soon.

To counter the pungent aftertaste of the Kolkata bekti, we decide to share a nolen gurer, or home-made date palm jaggery, ice cream. After spending 2 hours talking, we leave discussing UTI Mutual Fund’s new TV advertisement (a young son takes his father, a former Ranji Trophy player, to watch a match at Lord’s, UK) with the tag line, Haq Ek Behtar Zindagi Ka (The right to a better life).

In the universe of asset managers, will UTI AMC regain its fortunes, and reclaim its right to a better life? Puri’s five-year term will be a test.

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Published: 17 Jan 2015, 12:14 AM IST
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