The Hindu Business Line : `Our game-plan is to do it right'

AFTER three years of being a passive player in the mutual fund industry, ING Vysya MF is pulling up its socks and catching up with competition. Ms Kavita Hurry, Managing Director & Chief Executive Officer, ING Investment Management India, talks to Business Line about its distribution focus and future plans.

ING Vysya Mutual Fund has not been a leading player in the industry in terms of assets under management (AUM) or new funds. But, there has been a flurry of product launches, specifically equity products, recently? Is this primarily to ride the bull market?

Our orientation is towards providing the retail community with a product that we think is going to last. India is on a different phase right now. We have never seen interest rates so low. We haven't seen the equity markets at 6000 levels with no smell of a scam.

Usually from here we have seen it only going down, we haven't seen it plateauing. Our feeling is that there is a confluence of various factors and the economy itself is doing very well. But, we still cannot stray from the fact that this is a new phase. If you are in unchartered territory, you should provide your clients with a product that has the balance to perform in such a phase. MIP has been launched with that backdrop.

We are treading carefully in that area. That is why we have taken the Nifty. Nifty stocks are well researched and if there is a problem, selling the stock is not an issue. We wanted to stick to 50 stocks that we think will do well over the next two years.

While other AMCs have been building up investor base and AUMs over the last 3-5 years, ING Vysya has been fairly low key. Has this translated into a significant loss of ground for you?

Yes. ING has not been in line with Prudential ICICI, Franklin Templeton, etc. But we have a different business model. ING wants to be in the fields of insurance, banking and asset management.

The AMC is one arm of the company. The insurance business feeds the asset management business; the premiums received are managed by the AMC. Then, we took the AMC function to the public at large. Similarly, banking set up is the feeder from the client point of view.

Currently, we have two million retail customers of the bank. None of the players in this industry has nurtured the retail business.

ING was building the business quietly on the side to build a captive distribution. Our game-plan is to do it right - and the right way to do it is by being a retail player.

Unlike others, we don't have a corporate chase for AUMs. It was everyone's in this game of AUMs and I'll say that AUMs are pretty much a farce in this industry.

So if not AUMs, what is your strategy for building the business?

We are developing things very differently from a product design standpoint. We have specific schemes for corporate and retail investors. MIP Plan A is for corporates, while Plan B, with benefits of ATM access, etc., is largely for retail.

Plan A was specifically thought for corporates who don't want to take the call of where to move - short maturity, long maturity, treasury portfolio, while plan B is primarily targeted at retail investors who save between Rs 20000 and Rs 1 lakh a year.

They do not have quality advice on debt-equity allocation that corporates or high networth individuals have.

He has no experience of equity markets and is now seeking to enter the market when it is at 6000 levels.

We'll do things with the life insurance arm now. You'll see going forward, combinations between life and bank, life and asset management and the MIP is the first combination of bank and asset management.

That is the power of the group - that you have all three-wealth creation methodologies available within the group.

And it is a common ownership. The bank owns 25 per cent of the AMC, so the bank is equally interested that I do well.

So our focus is on developing specific products tailor-made to investors and managing it very well.

We also have a captive base of two million customers of the bank. We will seek to manage their money first and then add strength to the third party distribution system.

What is INGs commitment to India? There are rumours about changes in the share-holding structure.

In the three worst years — 2000 to 2003 — ING was shrewd and invested close to Rs 1,000 crore in the country; this is between the bank, insurance and AMC.

In the worst years when everyone was packing up and going home, this was the only company that saw it as an opportunity and said markets will change, India does have a growth story and stayed put.

This is primarily because ING is first an insurance company and insurance companies are there for the long haul.

It is on the buy side of the book. In fact, the group will seek to up the stake when the time is right.

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