It is 10 months since Leo Puri took over as MD of UTI Asset Management Company after a prolonged recruitment process following a three-year period when it was headless. Arresting the slide in staff morale, getting the organisation ready for competition in the market place and regaining market leadership are the main tasks that he has set himself. Excerpts from an interview :

What are the changes you have brought in during the past 10 months?

We have spent time on first making sure that we had a clear understanding of our fundamental strengths and weaknesses and that we have properly diagnosed market shifts. While we found that we do have a loyal, committed work force, we also found that agility, responsiveness and elements of cross-functional collaboration need to evolve.

We are moving towards changes that are market-led and some of those are already visible. We have to create a sense of self-belief, particularly when you have been through a difficult time. That self-confidence and ability to think like a leader is slowly returning. We need to strengthen and reposition our brand with young, affluent emerging segments in the large and metro cities. We have been positioning ourselves externally in terms of channels, brands and products. We have built a strong foundation and we are at the beginning of a very positive cycle for capital markets in India.

Is this going to be a long bull run?

I think use of the term ‘bull run’ raises expectations to unrealistic levels. At a slightly more prosaic level, we are in a good environment for equity-related investments, since they are well poised to beat yields given by other asset classes. And provide a good hedge against inflation, which in recent times, they had failed to do.

There is a happy confluence of continuing benign macro economic environment and very positive impulse with regard to the Indian political system with a vote for economic progress and development. I think we can get closer to our potential growth rate of 8 per cent in a few years and this is one of the best environments to look at capital markets.

Why are people then redeeming their holdings?

That behaviour reflects that we are coming out of a period of challenging times. People, who have been invested in capital markets for long periods, do tend initially to exit and seek what they perceive to be safer avenues for their funds. Although we bemoan the fact that our retail investors get in at the top of the cycle and exit in frustration at the bottom, that is unfortunately a universal behaviour.

I would argue that the tendency to cash out is not entirely irrational. The industry will soon be getting through this phase of continued redemptions and I expect to see fresh flows come in during the next quarter and beyond.

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