When NEIL PARIKH, took over PPFAS AMC, there were many skeptics. But over the past six years, the AMC has made considerable improvements in its processes, technology initiatives, and day-to-day functioning. When he took over, the AMC had 4,000 investors with assets under management (AUM) of Rs 500 cr. Today, the number stands at around 10 lakh investors with AUM of Rs 15,000 cr.
Here he writes about his journey.
It was the fateful night of May 3, 2015, when I got the news that my parents met with a car accident in Omaha, U.S. Soon after, I got to know that my father did not survive.
Overnight, the board of PPFAS Mutual Fund handed me the responsibility of heading the company. While, I had been with the firm since 2004, I hadn’t envisaged taking over from the legendary Parag Parikh this soon, and in such tragic circumstances.
Naturally, there were obstacles but most of those were in the mind. There was self-doubt - How will I be perceived stepping into those big shoes? Was I the right person for the job? Would I do justice to the role?
I realized that the only way to combat this was to embrace my position wholeheartedly. I reached out to well-wishers, investors, and my colleagues with an open mind and a keenness to listen. I needed to understand their concerns and welcome their feedback if I was to build trust.
The other issue at the time was negativity and rumours faced by the organization. At this time, it was all the more important for us to keep our heads down, blinkers on and focus on the task at hand. During this period, we made internal communication a major priority in order to cut the noise down.
Over the last six years, I have learned a lot. Here are my few important takeaways-
There is no I in TEAM.
If an organization is to run like a well-oiled machine, there must be a cohesiveness to it. I cannot overestimate the absolute importance of surrounding oneself with a team that you can trust and rely on, and vice versa. It has been my biggest asset and strength. I have seen teamwork convert a crisis into an opportunity.
The hallmark of a good team is how they stand in tough times. The fact that I have been around for a long time with most of my colleagues helped us ride out the hard times together. They were familiar with my personality and management style which aided the transition.
But what keeps the team together? It is a common goal, along with shared values and ethics. This does not happen automatically but over years and decades of being consistent in our approach. It is this consistency which becomes the organization’s legacy.
My job is to make sure we stay together, enjoy each other’s company, and not lose perspective of the bigger picture.
Don’t tinker with the core values.
Amidst the changes that the organization was going through, I ensured that the foundation that my father built remained constant and unchanged – the culture of our organization, our investment process, the values and philosophy of the firm, and our belief systems. There was absolutely no need to tinker with the important things that define an organization. Hence, taking over actually meant maintaining continuity and not screwing up. Disruption for its own sake is pointless. Making sure I uphold the reputation of the firm was paramount on my mind. These few things were non-negotiable. If I could manage to keep these core fundamentals intact, I was confident success would follow.
I was fortunate to be guided by our founder- Parag Parikh’s teachings from a very young age. Along with him, my senior colleague, and the current CIO of PPFAS MF, Rajeev Thakkar, have been instrumental in shaping my outlook and understanding towards embracing the important concepts that will aid in taking our organization forward.
The he‘art’ to say NO.
This is one of the most underrated skills and it took me a while to develop some mastery on this front.
The ability to say ‘No’ decisively and quickly can lead to huge savings in time, resources, and mental peace. It gets everyone in the organization focused on the essential attributes that we look for in people/organizations. From a personal standpoint, it surely enhances self- confidence as you make swift decisions.
The realization that you cannot please everyone and there is no point attempting to do that, has helped us a great deal to streamline our energies to those that matter. Sure, there will be hurt egos, lost acquaintances, and missed revenues. But if there are no synergies in values and mindset, then this is a small price to pay. After all, nothing beats having a good night’s sleep!
Warning: Try this with your better half at your own peril.
Why are we here? Where are we going?
We are in the profession of building trust and goodwill and NOT in the business of gathering AUM.
This is ingrained in the DNA of the firm, and it is imperative that we do not waver from this core value as we continue to grow. I honestly believe that this is the most important factor in my organization.
A professional (like a lawyer or doctor) is supposed to do what is in the best interest of the client. However, if it is a business then each action of the provider will be scrutinized as to whether it makes business sense or not. In our industry, this leads to launching multiple schemes and selling flavor-of-the-month products, which are usually not in the best interest of investors. Often in a business, business interests supersede the interest of clients.
If one is able to demonstrate her professionalism, then trust and goodwill will surely follow. This will help in creating long term sustainable relationships and help build a community of like-minded stakeholders who will stick with you through the ups and downs. This strategy is surely not the way to get big quickly. But for us, this was never the goal. The goal is to be a well trusted AMC, rather than chase AUM rankings.
For this to be a possibility, we need to be obsessively focused on doing the following things right:
- Integrity in all our actions
- Complete transparency in our communications
- Absolute discipline in our investment process
If we manage to do these consistently well going forward, then I believe we will challenge the paradigm of the mutual fund industry of it being a ‘push’ product. Our objective is to make investors and partners buy our product, rather than sell it. Only time will tell if we are successful in our endeavor.
I hope we at PPFAS are making our founder proud.
Thank you for reading.
Neil Parikh, Chairman and CEO, PPFAS AMC