Masayoshi Son
July 18, 2019Dr. Ivan Joseph
August 1, 2019
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.
1. What does a FUND MANAGER do ?
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.
2. Can you share your Daily Routine with us?
- Waking up and reading the newspapers (online and offline). I read global news of countries such as the US, India, UK, and China.
- Post reaching my office, I start working on my research which includes speaking to the management of companies and using their guidance along with my judgment to build financial models.
- Post valuation of companies, I deploy funds in their stocks (if at all). Then I also speak to investors educating them on our product and asking them to invest more with us.
- My job hours are really lengthy. A general day begins at 7am and ends at 7pm.
3. How did you reach this stage in your career?
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.
4. What skills should a candidate possess if he wants to take up a profession similar to yours?
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.
5. What are the Pros & Cons of your profession?
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.
Excel sheets and newspapers can be boring or exciting, it all depends on the mind-set of the individual.
The same lies with traveling, which is also a huge part of my job (to meet companies and investors).
6. What is the best way to bag a job similar to yours?
First, get a degree from an institution from where you can get interviews with these asset managers or institutional brokers.
You will have to start somewhere at the bottom and work your way up to the high ranks.
7. What advice would you give to the freshers who are willing to venture into this line?
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.”
Hi. Could you recommend few books on Valuation which can be useful And is practical Driven rather than just theoretical concepts.