Marcellus Promises Niche Products Over 'Plain Vanilla' After Final SEBI Nod For Mutual Fund

Marcellus Investment Managers has received final approval from the Securities and Exchange Board of India (SEBI) to launch a mutual fund business, a major milestone for the firm since it was founded in 2018.

The firm, founded by Saurabh Mukherjea, has so far offered portfolio management services (PMS) and alternative investment funds (AIF). It will now tap India's fast-growing mutual fund market through Marcellus Mutual Fund, led by managing director and chief executive Pramod Gubbi. Mukherjea is the chief investment officer.

Gap In The Market

Asked how Marcellus plans to stand out in a crowded field, Mukherjea said the industry has reached an inflection point, with mass acceptance of the product that did not exist a decade ago. The gap, he said, is in choice. "There's a plain vanilla type element to what most mutual fund houses offer," he said, adding that Gubbi and the team will detail the products in the coming months.

Mukherjea credited SEBI for the public's faith in mass financial intermediation. The rigour of the licensing process and the inspections the firm went through reflected the care the regulator applies, he said.

'First Innings' Of India's Savings Story

Gubbi called the licence a privilege that should be treated as a responsibility. He disagreed that the space is crowded. India's financialisation of savings is only in its "first innings", he said, using a baseball analogy, and the multi-decade runway leaves room for many more asset management companies.

That also answers the question of timing, according to Gubbi. If the opportunity is a multi-decade story, any time is as good as another.

Alpha Versus Staying Invested

Gubbi said the discussion around Marcellus's PMS and AIF products has centred on alpha, or returns above the benchmark. "I don't think alpha is something that helps people fulfil their financial aspirations. It is that ability to stay invested," he said.

For that, he said, investors need a different set of offerings. Most investors do not have access to good advisors, and even good advisors tend to outsource asset allocation, leaving room for the fund house to add value. Multi-asset solutions, combined with systematic rules-based rebalancing, can build long-term wealth without the roller coaster of equity markets, he said. Mutual funds are also an extremely tax-efficient vehicle for such rebalancing, he added.

Global Products On The Cards

Gubbi said several innovative products from global markets have yet to reach India, and Marcellus hopes to bring a few of them to Indian investors.

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