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WF: You were a successful entrepreneur before agreeing to be bought over by Edelweiss, while retaining management responsibilities. What factors drove this decision and how has it worked out for you?
Radhika: The decision was really driven by the desire to scale a business we had build and that had tremendous potential that would be harnessed within the right platform and with the right partner. I have never looked at this as a transaction or a sale, but a chance to partner with a group that was a terrific cultural fit for who we were and what we wanted to do, and I think that the journey has worked out beautifully. The alternatives business was around 150 crores when we joined Edelweiss, and today it is over 3200 crores, a 20x growth in 3 years. The business growth is one lens of course, but the group has also given me a tremendous set of experiences and opportunities to grow.
WF: What are the key differences working for yourself vs operating under a larger brand?
Radhika: I think people expect there to be a sea change when you go from an entrepreneurial set up to a large brand, but I don't think the changes have been very substantial. Entrepreneurship is a mind set and way of working, and I think Edelweiss has a very open and entrepreneurial culture, much as what we had as a standalone entity. I think the two biggest benefits of a bigger brand, are that one it enables you to widen your aspirations and ambitions, and that it provides you a lot of support on the enterprise (operations, compliance, marketing, administration) that you cannot have in a standalone capacity.
WF: What are the pros and cons that entrepreneurs in the advisory and distribution spaces should keep in mind when considering such options of merging into larger brands and continuing with management responsibilities?
Radhika: I think entrepreneurs really have to think deep about what they aspire for before they take this kind of decision. If you are looking to build a boutique advisory business then a larger brand is not the right option, but if you are looking for real scale then it is the best alternative. I think the key aspect of the decision is who you choose to partner with because the choice of partner and the fit really dictates the answer. A partner will provide access, scale, technology, and capital, and if you can find someone where there is a match of aspirations and values, it makes a lot of sense. Any kind of partnership of course does mean letting go of some amount of control, and addition of some level of structure, which one has to be comfortable meeting.
WF: What goes into making a business saleable and then scalable?
Radhika: I think quality is the answer to both. A business will be saleable when it has a clearly defined value proposition and is delivering for its customers. Both the advisory and asset management businesses start with customers and if you have crafted a unique place for yourself because of what you are providing customers, and then you have a saleable business. When we talk about scalable, then platform is extremely important. At a smaller size, you may be able to get by with limited investments in technology, operations, HR and other enterprise functions, but as you scale you have to build a robust platform that can service a large number of customers efficiently.
WF: What are your plans with Edelweiss AMC? How do you wish to build a clear positioning for your fund house?
Radhika: We want to build Edelweiss AMC into one of the most respected brands in the asset management business. This means delivering consistent performance across products and delivering value for our distributors and investors. We are fortunate as an AMC to have one of the widest product ranges in the industry - long only equities, fixed income, hybrids and international funds - backed by the best talent in each asset class.
WF: Where do you see Edelweiss AMC in 5 years and what milestones have you set for your fund house over the next 5 years?
Radhika: We are very ambitious about this business and do see ourselves as a leader in this space over next 5-8 years. 1 lakh crore in 5 years is a number we are confident about. The journey is a gradual one, and it starts with interim milestones. Most importantly, the journey of scale is about delivering quality to our partners - in investments, sales, and service.
WF: What is your message to your distributors on what they can expect from Edelweiss AMC in the years ahead?
Radhika: Distributors should look at us as an AMC they can partner with for a long term and for a range of investment solutions - equity, debt, hybrid, and otherwise - and expect quality across the board. They should also look at us as a partner for knowledge, through the Edelweiss AMC Insights program, a unique initiative that brings the best of knowledge across businesses at Edelweiss to them through content, events, and customized training. Our relationship with distributors is not a transactional but a long term one, and we hope to bring the best of Edelweiss Group to help their business.
DISCLAIMER
Ms. Radhika Gupta is the Chief Executive Officer of Edelweiss Asset Management Limited and the views expressed above are her own.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
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