The Hindu Business Line : `Index movements are relatively insignificant'

It is 4.15 p.m. on a busy Friday and Pankaj Razdan is sitting across a shiny glass-top table in his new office. The news of the day is that the main stock market index has shed nearly 300 points, a drop that does not ruffle the large-framed MD of ICICI Prudential Mutual Fund at all.

"Why should it?", he asks pointedly before rattling off, in a few well-chosen words, the reasons why index movements per se are relatively insignificant.

Words such as these, he adds later as an afterthought, almost sagely, play a key part of his everyday life; they help him communicate with investors, colleagues and anyone else who wants to listen about mutual funds.

Fund houses - he minces no words here - need to be at the cutting edge of best practices. Such practices, in fact, should embrace every aspect of the asset management business. In particular, these should benefit the case of investor servicing and distributor empowerment.

"Where is the funds industry going?", we ask him, hoping perhaps to hear a well-rehearsed answer. Surprisingly, Mr Razdan does not directly talk about intensifying competition (by way of the Reliance MFs of the world, not to mention the arrival of JP Morgan and AIG). Competition is a given; as in so many other industries, it brings out the best in you, he argues.

"One of the ways of making funds more accessible to people is to bring down entry barriers. The introduction of what we are calling `micro SIP' is, therefore, important", he says, while referring to SIP amounts that can now be as low as Rs 50.

The whole idea, as one understands, is to reach out to the average Indian, including to those who are testing managed products for the first time.

Just in case you wish to catch the ICICI Pru MF chief's views on myriad other issues, here is a quick compendium:

On shortage of talent in the AMC business: There is a serious shortage of good people everywhere, and this is being felt acutely in the world of funds too. We need to create a talent pool for the industry and the time has come to make a new beginning on this front

On hiring new people: There is no reason to fret that the funds industry has so many so-called `outsiders', including those from the FMCG sector. It is important for us to read the consumers' mind well. A well-trained FMCG specialist, if he or she can do that well, is welcome. We should encourage people from across sectors to come to us.

On rising expenses: This is a virtual conundrum for the industry. It follows from the kind of growth that funds are recording. While so much is being done at so many levels, we need to focus on a few basic strategies.

On competition from ULIPs: At the end of the day, the investor has to take a call. If you buy a product, buy it after understanding all its features, including initial costs.

Feedback may be sent to nilanjan@thehindu.co.in

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