In conversation with Aditya Khemka, Fund Manager at DSP Investment Managers Pvt Ltd. He started his career at Glenmark in Corporate Finance division, and then worked at Nomura and Ambit in the Equity Analysis domain for the Pharma Sector, before becoming a Fund Manager. We would like to understand the role of a Fund Manager from him and How to become one.
Being a Fund manager at a Mutual Fund, we collect money from individuals or companies and invest on their behalf. In exchange for this service, we charge a small fraction of the annual fee (~1% of the funds managed). This job involves understanding the fundamentals of companies and valuing them based on various financial aspects and projections. Hence deciding, where to invest and how much to invest. My job entails 3 aspects - Research, Fund management, and Marketing.Research involves valuing the fundamentals of companies, Fund management requires deploying funds and buying stocks of the aforementioned companies. And, marketing includes going on roadshows to portray our product to the investors and convincing them to invest with us.
I completed my CFA and MBA when I was 25 years. Then, I joined Glenmark Pharma in their treasury dept. to see how corporate India takes financial decisions and engages in financial management. Post this assignment, I joined Lehman Brothers (US), Nomura (Europe and India) and Ambit Capital (India), after which I have been working with DSP Investment Managers Pvt Ltd for nearly 4 years now. I have truly been fortunate to have a global exposure while working in an industry that is global at its core.
The asset management industry generally demands an impressive educational background. While a CFA is a must, an MBA from an A-league B school in Finance helps immensely.
A sound understanding of numbers and models is also crucial, however, logical reasoning and data analysis are supreme. You must remember that there is no space for emotions in this world as you deal with a lot of money that doesn't belong to you. Similarly, there is no space for greed or fear. All decisions in this industry are based on facts, expectations and solid evidence-based analysis.
So basically, the candidate should exhibit a rational mind that can distil facts and opinions and can see through emotions. We have many great friends who are owners of companies that we have never invested in and probably will never invest in. We have invested in many stocks where we don't even know the promoter very well, but we believe the business model is extremely concrete and can yield major returns as it keeps growing.
As I mentioned earlier, this profession involves long working hours and requires a huge amount of diligence. Hence, I wouldn't really identify it as "exciting".
Investing is like watching grass grow, it is uneventful. But the real joy lies in seeing the grass become a bush overtime. Just like the grass, investing needs loads of patience and constant self-check. This can be very repetitive and boring on occasions. The daily routine is similarly repetitive many times. However, for me, the good part of the job is the pleasure we get once the investor sees his hard-earned earnings compound over time and which helps them to grow their wealth.
The same lies with traveling, which is also a huge part of my job (to meet companies and investors).
First, get a degree from an institution from where you can get interviews with these asset managers or institutional brokers.
Study hard and make maths and analysis a part of your every minute thought process. Ask questions we don't think about and are unaware of. Read a bunch of books on investing. Be prepared to face mental and emotional stress, which is a part of the package.
“The views & opinions expressed in the article are that of the author. The blog contains the opinions of the author and doesn’t reflect the opinions of any organizations with which the author may be associated.”
“I’m a Commerce graduate from St. Xavier’s College, Kolkata and have completed CA (Rank holder), CFA(USA), FRM(USA), CAIA(USA), CCRA, CIPM, AIM and CS. At present, I am a visiting faculty at St. Xavier’s College, NSE, BSE; B-Schools like iLead, BIBS along with several other institutes; am a full-time trainer for CFA, FRM and SFM – CA Final. Provide trainings at organizations like Tata Interactive Systems, Volvo-Eicher(VECV), Genpact, AIITA, EIRC-ICAI, Saregama, Quaker Chem, Century Ply, AUM Capital etc. on Finance and Advance Excel.