Despite being mired in controversy, UTI MF is very uniquely positioned, says managing director Leo Puri. The country still needs an institution that is independent, is able to mobilize capital and deploy it productively, he says. He says this provides him with an opportunity to work towards strengthening an institution that has such a strong sense of purpose around it, he adds.
Without exaggerating UTIs importance, Puri sees it as part of his role to bring back the faith and confidence that UTI MF is the best intermediary through which households across India can channel its savings into debt and equity products.
Below is the verbatim transcript of Leo Puri's interview on CNBC-TV18
Q: Let me start by asking you about what compelled you to want to even get into this business of trying to come in and run UTI. It has been an organization that was mired in controversy; it has been headless for over two years now. Your appointment itself and the selection process from the time that you first got a call to your appointment was an 18 month long process. For a man who spent his entire career in the private sector why would you do this to yourself?
A: This is still an institution which represents the best of the Indian financial system. It did get into trouble – some of it self inflicted during the course of its history, but the country still needs an institution that is independent, is able to mobilize capital and deploy it productively. UTI is uniquely positioned in my view to play that role.
As a professional at my stage – in my early 50s now there are few opportunities I could think of frankly which would allow me to feel I was able to contribute in a sense to strengthening an institution that has such a strong sense of purpose around it. It is for that reason that I felt this was the institution I would want to serve and help restore to its natural role in the system.
Q: As we look at the future and as we look at FY14 what do you intend doing to stir things up if I could use that word for UTI because both in terms of assets under management or profitability on all of those parameters we have actually seen you fall in the pecking order. So, what can we really expect as far as UTI's future is concerned?
A: At a fundamental level this industry does need to mature. Some of the challenges that the industry has faced have been self inflicted. Products have not been perhaps as well positioned to all segments as they could have been. Drawn the ire of regulators through what is allegedly mis-selling. We have had issues around perhaps commitments that were made and not kept and so on. So, we have to take and acknowledge all of that as you look forward.
However it is also true that in every mature financial system the role of an asset manager or mutual fund is to bring capital into the markets in order to actually fund the growth of industry and if that job is not done well we actually have a systemic problem. Without perhaps exaggerating UTIs importance I certainly see it as part of our role to bring back the faith and confidence that we are the best intermediary through which households across India can channel their savings into debt and equity products.
Q: Your job gets even tougher in the current environment which is uncertain, where you don’t know whether you are going to be talking about 4000 or you are going to be talking about 6000 as far as the Nifty is concerned or 20000 on the Sensex. So, one day you are being written off and the next day you are back with a 700 point rally?
A: This environment probably proves more than anything other the importance of the mutual fund industry and the importance of professional asset management advice as the long term solution to how households actually allocate their savings. It is our role now to stand by our investors, help them think through asset allocation decisions and help educate our intermediaries to do the same who are also very important to our business.
We can do that partly through investor education, we can do that partly through intermediary education and ofcourse we have to directly ensure that we communicate this message to investors. But this is a very good time for us to come out and step forward and underline that message that the role that we play is to fundamentally provide a long term stable professional home which is secure and hopefully will help to protect and grow their assets.