MC Interview | Shriram AMC to focus on hybrid funds: Umesh Revankar

Umesh Revankar

Shriram Asset Management Company (AMC) is likely to focus more on hybrid funds, going forward, said Umesh Revankar, Executive Vice-Chairman, Shriram Group, in an exclusive interview with Moneycontrol on November 8.

Revankar further said that the fund house will not immediately launch a pure equity fund because it needs to build certain knowledge, experience, and research capabilities.

In August, Shriram Group launched the Shriram Multi Asset Allocation Fund to offer long-term inflation-adjusted wealth creation through exposure to multiple assets such as equity, debt, and gold/silver ETFs.

In an exclusive interview with Moneycontrol, Revankar said that earlier too, the company had launched a liquid fund.

On the asset reconstruction company (ARC) business front, Revankar said that the company has earmarked Rs 300 crore for the new business to aggregate retail bad loans. For this, Shriram Capital has already applied to the Reserve Bank of India (RBI) for a licence.

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Edited excerpts of the interview:

As you have relaunched your AMC business, what will be your focus area?

Recently, we launched a hybrid fund. Earlier, too, we had a liquid fund. We would like to get into this segment to help our customers invest. Most of our customers are likely to invest Rs 5 to Rs 10 lakh. We feel that should benefit them. The idea is to create awareness among our savings customers and borrowers to make that investment.

I feel that in India, there is an overemphasis on physical assets like land and gold. So, if we give them options, such as mutual funds, which are highly liquid, more people will participate.

Our focus will be on hybrid, pure equity, we will not immediately launch because we need to build certain knowledge, experience, and research capabilities. We are building these within the group.

Can you shed some light on the wealth advisory business? 

Wealth advisory is a low-fee income business, and the customers we will be focusing on will be from the smaller wealth category -- Rs 5 lakh to Rs 50 lakh. The moment it touches Rs 1 crore plus, they go to larger advisors. We would like to build our practice in this segment, and we believe that there is a huge opportunity here because most families in India are middle-income or middle-class, and they have a huge need for advisors. We want to build a practice that will be helpful for them.

We are starting our wealth advisory business soon and are looking for people.

When is your ARC business likely to start?

Whatever is there on the regulator's (Reserve Bank of India) table, we cannot predict. But we would love to start it this financial year.

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What would be your initial investment in setting up the ARC?

We have earmarked Rs 300 crore in capital for the ARC business. This will be for the purchase of the retail assets that we have planned to acquire through this ARC.

We are focusing more on retail loans because that is our strength. We feel it has high margins. Basically, the small-ticket business has high margins.

As our expertise improves, we will increase the ticket size from Rs 20 lakh.