Case Study - Indian Asset Management Industry Monitor

Overview

This case study is about industry/sector research for a global investment firm with 500 Bn AUM that holds a significant stake in a top 3 Indian asset management company. Every month, the investment team reviews the Indian mutual fund industry: tracking flows in or out of funds, how funds are performing, movements in market share, and what that means for the revenue of its portfolio company and their peers.

Problem: Tedious Data Collation and Complex Analysis

The sector review used to run on an Excel template. Before any analysis could start, an analyst would spend a couple of days each month collating data from AMFI and various mutual fund regulatory disclosures.

Apart from being tedious data gathering, this data is sometimes messy and needs cleanups. For example - fund houses occasionally report AUM in incorrect scale (absolute vs crores), a fund's NAV jumps when it changes its units, and some funds miss days. In a spreadsheet, these errors flow into the totals without warning, and they are easy to miss.

The template covered a fixed set of views, and every new view meant more days of data plumbing, so questions outside the template could go unanswered.

Solutioning: Understanding, iterating and trust

Initially, we spoke with the analyst team to understand what they track in the industry and how they go about it. That set the scope: fund flows, industry flows, scheme performance and market share.

The central calculation splits each fund's change in AUM into two parts: money put in or taken out by investors (net flows), and the change in valuation due to market movements. Funds do not report the net flow numbers but they report daily NAV. We estimate net flows as the difference of change in AUM and the change in valuation using the reported NAV.

The split matters for revenue: a fund growing on flows is winning investors, while one growing on market movement is riding the market, and its fee income will fall when the market does.

Every number passes data-quality rules before it reaches the dashboard:

• An AUM figure more than 50 times the fund's usual level is dropped as a reporting error.
• A one-day NAV move of more than +25% or −20% is treated as a change in units, not a return.
• A fund needs prices for at least 90% of the days in a period to be included.
• Market movement can never exceed 1.5 times the fund's opening AUM.

These rules run on every refresh, alongside 54 automated checks. During the build, these checks caught errors that a spreadsheet would have hidden.

To earn the analyst's trust, we provided an Excel file that reproduces every number on the dashboard with the formulas behind it. The analyst went through every formula and signed off on the method before go-live.

Final outcome: Automated Industry Monitor

A live dashboard replaced the template. It covers 4,000 share classes and 2,000 funds across 50 asset managers, with more than ten years of NAV, AUM, benchmark and expense data. New data appears as soon as AMFI or the fund releases it. The analyst picks a period, an asset class, a category or a fund house, and every page follows.

Each page answers a question the team asks about its holdings:

• Flows and market movement - Splits each fund house's change in AUM into net flows and market movement, the split that drives revenue projections.
• Scheme flows - Shows which schemes are bringing money in and which are losing it, and whether a fund house depends on one or two products.
• Industry flows - Tracks where money is moving across asset classes and categories, by month, quarter and financial year, and whether a portfolio company is positioned where investors are going.
• Direct vs Regular - Splits AUM by plan. The regular share is business that comes through distributors, which drives distribution cost and margin.
• Returns and quartile ranks - Ranks each fund against its category peers, for lump sum and SIP, and shows the share of a fund house's AUM in the top two quartiles. Performance tends to lead flows, so this is an early read on future flows.
• Market share - Shows which fund houses are gaining or losing ground, on AUM and on flows. Flow share moves before AUM share does.

The first version was ready in a day. Once the analyst saw it, the requests came quickly, mostly for analysis that had been skipped because collecting the data took too long. The dashboard went live two weeks after the first meeting. Since then, the analyst has extended market share from AUM to flows and added a switch to count arbitrage funds as either equity or debt, which changes how each fund house's equity business compares with its peers. Each change was asked for in plain English and took minutes.

Value Delivered

The two days of data collection each month are gone, and the team now answers questions the template never covered.