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Kotak Mahindra eyes entry into top-5 MF club

KR Srivats New Delhi | Updated on July 20, 2019 Published on July 20, 2019

Fund house is now the sixth largest by assets under management; plans to go deep into Tier 2 and 3 towns for growth, says National Sales Head Mehta

Kotak Mahindra Mutual Fund is on the fast lane, growing at a frenetic pace by assets under management (AUM).

After recently moving up to sixth position — dislodging UTI Mutual Fund — in the mutual fund industry pecking order from ninth as of 2015, this fund house is now eyeing entry into the top five league, Manish Mehta, National Head — Sales & Marketing, Kotak Mahindra Asset Management Company, told BusinessLine here.

From a level of ₹39,500 crore AUM in the year 2015, the total AUM had grown to ₹1.5-lakh crore as of end March 2019 and now stands at ₹1.7-lakh crore.

Within the equity segment, Kotak Mahindra Mutual Fund’s Multicap Fund has seen a journey of ₹300 crore to ₹25,000 crore today.

“Of course, we want to be in the top five. We will work towards it. This rapid rise from ninth to sixth has happened because every year we kept growing ahead of industry. As long as we are able to maintain this momentum, we should be able to get into the top five league,” Mehta said when asked if Kotak Mahindra MF wants to get into the top five rankings in mutual fund industry pecking order.

Mehta said that the rapid rise in its AUM in recent years could be attributed to the breadth of distribution, reach across institutional clients, ensuring a product suite which matches the requirement of every customer segment and consistency of performance.

B30 cities

Going forward, Kotak Mutual Fund plans to go deep beyond the top 30 cities, where there is now good traction for mutual funds on the back of improved awareness.

Currently, B30 cities (beyond top 30 cities) contribute 15 per cent to overall AUM of industry, while at Kotak it is a little below 10 per cent.

“I know I am way below the industry average. Our endeavour would be to go deeper in smaller cities and come in line with industry level. There is a lot of headroom to grow, and understanding of mutual funds has increased tremendously in the B30 cities,” Mehta said.

At the same time, Kotak Mutual Fund also plans to spread itself in big metro locations, where it is already present.

Post demonetisation, people have transitioned from physical savings/assets to financial savings. As acceptability and comfort of Kotak Mutual Fund has started to develop among mutual fund investors in recent years, this fund house may have benefited disproportionately, he noted.

Currently, Kotak Mutual Fund has over 20,000 IFAs and efforts will be made to ramp up this number, Mehta added.

On listing

Meanwhile, asked if the fund house had any plans of listing itself on the bourses, Mehta replied in the negative.

Published on July 20, 2019
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