MFs hunt for head honchos

MUMBAI: Fund flows into domestic mutual funds may have cooled down over the last couple of months. But this is in stark contrast to the demand for professionals in the fund management industry, which continues to remain hot.

With many foreign fund houses waiting on the sidelines to enter the Indian market, the battle for talent is only set to intensify in the coming days.

At present, there are 26 fund houses managing around Rs 2.80 lakh crore worth of assets across various categories. The lack of availability of skilled manpower is being felt all the way up to the chief executive officer’s position.

At least six major fund houses, which includes existing players like Birla Sun Life, JM Mutual Fund and players yet to start their operations, like Axa and AIG, are believed to be scouting for CEOs.

“A CEO’s job in the mutual fund industry has become a very specialised one over the last few years, especially with regulations getting complex,” said the CEO at a domestic mutual house. “The fact is that there are not enough professionals who have a sound understanding of both the fund management side as well as the regulatory aspects,” he said.

This apart, another important trait for a mutual fund chief executive is that he should be able to connect well with the local distributors of mutual fund products. Industry sources said that a mutual fund CEO can now command an annual package of around Rs 2-3 crore.

There is also strong demand for fund managers and chief investment officers. “Many analysts have moved on to fund management side, but there is still a shortage,” said the official at a mutual fund.

“A prerequisite for a good fund manager is that he must have experienced a couple of (boom/bust) cycles in the stock market. You have to lose money before you can learn to make money,” he said.

While manpower shortage is being felt in almost every sector in corporate India, what makes the situation more difficult for the mutual fund industry is that it is still in an evolutionary phase. Fund flows into the mutual fund industry have started strengthening only over the last 4-5 years.

The size of assets under management even now is tiny compared with the standards in developed markets, or even by the size of its own economy. But industry watchers feel that is set to change, and the industry is expected to clock a double digit growth rate over the next few years.