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In an industry where the majority of chief executive officers (CEOs) are from the marketing and sales divisions, Suresh Soni of DWS has managed a rare feat.
He is one of the few CIOs who have grown out of their investment roles to head the entire business. Soni spoke to N Sundaresha Subramanian and Sachin Mampatta of DNA Money on the challenges and the road ahead soon after assuming his new position as the CEO of Deutsche Asset Management. Excerpts:
Congratulations on your new role. Do you think this is going to be a difficult job?
Thank you. Well, I’ve been with the firm since inception. In the past six years, I have come to know the firm. I’ve also spent 15 years in the mutual fund industry. The experience should hopefully hold me in good stead and help me meet the expectations.
CEO is not the only position you hold in the firm. You are also the CIO. How do you see yourself handling this dual responsibility?
See, the AMC has a clear organisational structure. On either side, in marketing and investment, there are dedicated teams. As a CEO, I have more of a supervisory role. So there shouldn’t be a problem.
With the markets not exactly headed for the stars right now, is this a difficult time to be taking over?
Markets are tough, both equity as well as debt have been going through a rather difficult phase. However, the function of an asset manager perhaps goes beyond making money when everybody else is. It also entails providing solutions when the going gets tough.
Funds with some exposure to the realty space have had a few problems. Have you also taken positions in realty companies? How has it affected you?
Yes, we did have some exposure to debt in the realty markets. However, we had vetted all our investments and have faced no problems on the realty front. Since realty can be a cyclical sector, we decided to limit our exposure to a one-year timeframe. This has served us well.
What is your current outlook on the realty sector?
We are expecting pain in that sector and there are a number of good reasons for it. High realty prices, rising interest rates and a slowing economy have affected the industry. Besides, they have been facing a paucity of funds due to the fall in the equity markets.
What is your view on the equity markets today? Do you believe the bull run has ended?
We prefer to look at it as a correction rather than as the end of the bull run. The fall has some positives. It forces people to rethink their investments. It separates the men from the boys and shows how many can hold on to performance in an unfavourable environment.
What about the negatives? What specific challenges are you facing on account of the downtrend?
The problems apply to the industry as a whole. It becomes more difficult to raise funds. We may decide to come out with certain offerings at a more favourable time. However, work doesn’t stop. For example, we plan to come out with a gilt fund in the next one month. We just focus a lot more on existing products.
What plans for the future as far as the retail side is concerned?
We are looking at doubling the number of IFAs (independent financial advisers) over the next six months and doubling them again over the six months that follow. So, in one year from now, our agent network will grow four-fold.
Do you have a game plan for the newer AMCs cropping up? How do you keep pace?
Competition-wise, whether you are competing with 35 AMCs or 37 AMCs is not going to make a lot of difference. As an industry, there is a lot of ground to be covered. So growth can be complementary. It’s not a dog-eat-dog world out there yet.
Competition-wise, whether you are competing with 35 AMCs or 37 AMCs is not going to make a lot of difference. As an industry, there is a lot of ground to be covered. So growth can be complementary. It’s not a dog-eat-dog world out there yet.”
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