Before joining IL&FS AMC, Mr. Ramgopal Kundurthi, CIO, Fixed Income, headed the Resources and Treasury at IL&FS. He also handled banking and institutional relations and project syndication among other activities. Prior to that he was at the Reserve Bank of India where he was exposed to policy issues in G-sec market, handling of currency positions and US$/Re desk and swaps, forecasting in GDP/US$ and US$/yen and inspections of several banks in various functional areas.

Mr. Kundurthi holds an M.A. and M. Phil degree in Economics from Gokhale Institute, Pune University and a Master of Financial Management (MFM) degree from Jamnalal Bajaj Institute, Bombay University.

In a brief interview with Personalfn, Mr. Ramgopal Kundurthi offered his views on the economy and interest rates and IL&FS AMC’s initiatives.

PFN: What is your view on the current economic scenario?

Mr. Kundurthi The industry is on recovery path. Infrastructure and services are doing well. The short fall in agricultural output will thus not be a major concern for the overall economy. The other macro variables continue to be sound with strong rupee, strong growth in forex reserves, low inflation, government expenditure seemingly under control, improved geo-political factors etc.

PFN: How do you see interest rates moving in the short to medium term (6 months)?

Mr. Kundurthi The markets have become quite volatile with all the previous medium term targets overshot in few trading sessions. Currently we see the market consolidating in the short term and over next six months see it in a range but with bias towards soft interest rates. The risk factors to this view are higher inflation, continued inaction on structural issues of fiscal situation and second-generation reforms, global interest rates hitting a cyclical trough and a sharp credit off-take.

PFN: You have a significant chunk of institutional funds in your Income Plan. What are you doing to woo the retail segment?

Mr. Kundurthi We are reaching out to retail audience in a variety of ways. We believe that over long hauls, retail investors provide a major growth avenue for mutual funds. One of our important educational initiatives Mindstorm is to increase awareness of mutual funds among the retail. Mindstorm is a neutral platform created by IL&FS Asset Management Company, to identify and fill knowledge and skill gaps of investors and those who deal with various facets of the financial services sector We have also trained our distributors on the relative efficiency of the format of open-ended mutual funds.

PFN: Do you think having a large chunk of institutional funds that flows in and out sporadically, works to the detriment of the smaller investor?

Mr. Kundurthi Both institutional investors and retail investors have a role to play in the success of a mutual fund. Institutional investors bring in clout while retail investors bring in stability. Ideally they should not be viewed as one versus the other.

PFN: What are the biggest challenges facing IL&FS Mutual Fund as a fund house in general and its Income Fund in particular?

Mr. Kundurthi IL&FS Mutual Fund in the last year has been successful in achieving an aggressive growth rate. While we have always made sure that our investors have experienced service of high standards, we will strive to achieve and ensure that we deliver it to the larger base too.

With regards to the Bond Fund we are focused on the quality of portfolio that has helped deliver a satisfactory performance and the challenge here is to sustain the quality and relatively high returns offered in the last six months.

PFN: With so much money flowing in debt, the domestic fund industry continues to be debt-oriented. This lends credence to the view that the industry hasn't really succeeded in harnessing its potential to attract equity investors except in brief spurts during bull runs. Your comments?

Mr. Kundurthi The retail participation has been much higher in equity schemes than the debt schemes. Since the equity markets have not been performing up to the expectations, maybe this feeling has crept in. It is only in the long run that we can assess the success of the industry in attracting retail participation.

PFN: There seems to be a shake-up in the industry at this stage and some mutual funds could be up for grabs. Would you be looking at acquiring some of these assets given that the mutual fund business is a volume game and smaller players tend to get marginalised.

Mr. Kundurthi Funds with a long-term commitment would be looking at both organic and inorganic growth and IL&FS MF is no exception. As far as the specific plans are concerned, it is a shareholder and Board level issue and it will not be appropriate for me to comment on the same.

PFN: Who are the three persons who have had a major influence on your life?

Mr. Kundurthi My ex-boss who created an excellent dealing team in a PSU set-up A friend at post-graduation who brought about my competitive spirit A friend at post-graduation who always brought about the child in me

PFN: What are your favourite books?

Mr. Kundurthi Games People Play, Jonathan Livingstone, SeagullNovels of Dick Francis, Wilber Smith

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