Rajeev Thakkar discusses the business aspects of Asset Management

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Financial Opportunities Forum [October 24, 2017]

Mr. Rajeev Thakkar, CIO, PPFAS Mutual Fund discusses The Asset Management Companies in India.

There are 44 asset management companies in India. Based on AUM alone, one cannot decipher whether the AMCs' are profitable or not.

Many aspects such as AMC assets composition, type of schemes, expense ratio need to be looked at, to assess profitability.

In the industry expense ratio is being clamped down by regulators, and its important to keep costs low. This business is scalable, but budgets have to be prepared judiciously.

The industry in growth phase and potential is immense in long term as the percentage of folios of total population is less than 3 %. approximately.

Prudent management and vision can make AMCS highly profitable with high margins and ROEs.