White Oak Capital is the latest entrant to the mutual fund space. Led by the founder Prashant Khemka, the new fund house would have Aashish Somaiyaa, the former chief executive of Motilal Oswal mutual fund, as its head. Last week, White Oak’s subsidiary, GPL Finance (the sponsor firm), got the regulatory nod to acquire YES Mutual Fund. In short, White Oak has got the license to run a mutual fund. It plans to file offer documents with SEBI for at least six new schemes within the next month.
White Oak offers Portfolio Management Services (PMS) and Alternative Investment Funds (AIFs). While the PMS and AIFs are mainly targeted at Indian investors, Khemka’s White Oak also manages international funds. It invests on behalf of large global institutional investors– pension and endowment funds – in India.
In an interaction with Moneycontrol’s Jash Kriplani, Somaiyaa says that White Oak has an investment team of around 25 already in Mumbai and Singapore. The newly set-up AMC will also have its own independent fund management team, some whose members would be recruited afresh, while a few others would be drafted in from its existing PMS and AIF fund management teams.
Khemka himself has been the co-chief executive officer of Goldman Sachs India Mutual Fund, before it was sold to Nippon India AMC. Somaiyaa says that it is mainly by relying on Khemka’s and White Oak’s track records in managing equities that the new fund house will focus on active-managed schemes. Excerpts.
Can you tell us what kind of investment products would be rolled out by your fund house?
To start with, our focus is going to be on actively-managed equity funds. Also, White Oak’s investment team has several professionals, with considerable experience in managing international equity assets. White Oak Capital has been managing over Rs 40,000 crore of assets from investors globally. So, over time, we may also want to take advantage of this expertise in the team and look at some emerging market products.
There already 43 fund houses, and new entrants are still making their way in. How will White Oak differentiate itself? Several of the new entrants are coming from the background of being strong in distribution. Some of these are strong fintech companies that have their own digital platforms.
No doubt, having strong technological and strong distribution capability is one of the critical success factors for any fund house. As far as we are concerned, we are coming from a professional fund management background. We are not a fintech or a broker or anything else.
Prashant Khemka, the founder of White Oak Capital Management, was the chief investment officer at Goldman Sachs Asset Management (GSAM) and worked for 17 years there. In 2017, he founded White Oak Capital. I have also been in the mutual fund industry for 21 years. White Oak’s investment team has several professionals with considerable experience in managing investment assets. So, what sets us apart from others is that we already have a track-record of investment management. That I believe is the most important factor in the asset management business.
Give us an idea of what sort of schemes we would see coming from the White Oak stable.
It would be difficult to say which would be the first offer document we would put out there right now. We are still discussing on this internally. Also, right now, we have got the approval to be a mutual fund sponsor from SEBI, which means we can takeover YES Mutual Fund. This transaction will take a few weeks to complete. What I can say is that initial fund launches would be focusing on domestic equity.
How have you seen investor behaviour evolve towards mutual funds? SIP flows for are also close to Rs 10,000 crore every month.
In the initial 10-12 years of my career, people used to always say mutual fund industry is the industry of the future, and that it is still evolving and is nascent. But now, mutual funds have become quite ubiquitous. Not quite like banks yet, but still mutual funds have got much wider acceptance now. A few years back, there were about 1 crore mutual fund investors. Now, we have 4-5 crore investors who are participating. The rising number of investors and more geographical penetration show that there is still a large market out there. So, there is still a lot of room for new fund houses to come in and participate.