10x in 5 years: How Radhika Gupta built a ₹1 trillion mutual fund company

When you joined Edelweiss AMC in 2017, did you have some sort of grand plan in mind?

We have had an AMC licence for many years. But with the JP Morgan acquisition, it was very clear that the Edelweiss group was going to focus on the business. Our team is a very execution-focused team rather than a debating and boardroom kind of team. So, the idea was just to get the basics in place. We had this phase called ‘Clean Up’ which was the post-merger cleanup, then catch up, and then go out and win. And that's honestly how it played out. So, we’ve grown from 40 people to about 300 today. We achieved this with no five-year plan, just getting execution off the ground. I remember also travelling very aggressively. I met thousands of distributors in the first year, just to sell our story. Even now, the team travels very aggressively. Post having a baby, I'm also in two locations a month. One large and one one midsize location, one developed and one emerging market, as we say. We're not travelling for an NFO (New Fund Offer). We’re just travelling to engage.

What are the factors behind your success?

The big one is a relentless focus on customer problems and solutions to them like Bharat Bond ETF or international funds. Then there’s communication. We're on Twitter a lot. We're out there. We are actually there to get market feedback, not brand building. We have a little product group in the office and we debate things on WhatsApp late at night and on the weekend! It's almost like a mini lab that no one knows about. Second, we have a really different kind of team. Nobody would join us in 2017 because I was a young leader and it was a young AMC. So, nearly everyone is a first-time head. Deepak Jain is a first-time head of sales. Niranjan Awasthi is doing marketing and leading a team for the first time. Rashida Roopawalla is a first-time COO (Chief Operating Officer). Because you have a young team now, there is a different kind of passion, belief and ability to challenge the industry. Over five years, these people have all stayed with us. We've hardly had employee turnover.

One key challenge is profitability, I was going through your financial statement for FY22 - net profit was just ₹20 crore.

So, ₹20 crore is not on a base of one lakh crore. Last year, we had average assets of about ₹65,000 crore. It is hard to build a profitable asset management business. I'm very proud that we've come this far. The asset management business is a business of operating leverage. So, you have to put the machinery into place and operating leverage starts playing out. Last year was the first year it played out. You'll see a profitability trajectory increasing. Passive debt funds (including Bharat Bond) by themselves are profitable as a category for us. Debt is a hard category to scale because in debt, pedigree matters more than performance in the minds of many investors. We got passive funds right and our entire distribution reach opened up after Bharat Bond. So, we worked with every national distributor in the country and our entire treasury access opened up. Sometimes a lot. So, when people asked me, was Bharat Bond a profitable profit proposition? Of course it was!

Did you face difficulties as a woman, in a male-dominated profession?

It was harder, not only because I am a woman, but because I was a young woman. My peers were significantly older than me. Our industry is an industry where people have come up the ranks, they have 15-20 years in the business. So, in my early days, I felt like an outsider. After many years, when I became AMFI vice chairman, I finally felt like that had finally changed.

If you had to write a letter to your child about your success, what would you say?

My team’s mantra has been ‘chappal ghiso’ (wear out your shoes). We have no choice but to work a little harder because we're not a big fund house. We have to be more available, we have to be more innovative. I buy five pairs of shoes every three months at least! I used to travel so much. Also, I will tell my child, don't let being different be a liability. Remember, it's an asset.