Kalpen Parekh | DSP Mutual Fund: Dons of Dalal Street: How a chemical engineer found his way to lead one of India’s top mutual fund house

You pursued chemical engineering, but moved on to do an MBA and enter into the finance world. What triggered this 360 degree turn in your career?
Most of my career moves have not been planned. They have a huge amount of randomness in it.

I did chemical engineering because in the early 90s, the industry was doing well. My dad was in the shipping business and he observed that a lot of ships in his company which were going loaded were from the chemical industry. So when it was time to choose the specialization, he recommended that I should do chemical engineering, and that is how I started.

I sought my admission in engineering and finished my engineering…and then I started working as an engineer. I worked in a couple of chemical factories spending most of my time with systems and pipelines and boilers and stuff like that.

I realised maybe this is not what excites me and to run away from that, I gave my entrance examination and got admission for MBA. That is how I moved from the field of chemical to management.

Managing Rs 1 lakh crore of assets isn’t an easy task. Have you been able to find your “Ikigai” in the wealth creation process and what’s that?
I know this
Ikigai term. It’s fairly fashionable right now though I have not read about it.

I have the book but I am yet to start, and I do not know if I have found what my calling is. But I do feel honoured and very responsible as my team at DSP is responsible for managing more than Rs 1 lakh crore of assets. But more importantly, we manage money for 35 lakh Indian investors and millions of households. Apart from that, we also manage money for a few international investors who want to invest in India. I think that more than size or the quantum, the whole idea of creating better financial futures for all of us makes me feel very excited and at the same time, very responsible.

What’s that one thing that pushes you to doing something better today than yesterday?
I have been fortunate to grow up with really good people around me and have many good role models who only brought excellence in what they do. Whether it is our most iconic cricketer Kapil Dev or my Bollywood hero Amitabh Bachchan or the musician and singer Jagjit Singh. Even when I looked at my father, he really worked very hard coming from middle classroots. He always said that work is worship and whatever we do, we need to give our best, and coupled that with what I said earlier that if we bring excellence to what we do, it will really help us create better financial futures for millions of investors so these are things that make me feel I am fortunate.

There are very few people who are at the right time and right place to get the privilege of being surrounded by great talent and good people. So, excellence I think automatically becomes a part of whatever you aspire for, and I still feel that there is a long way to go to feel satisfied and content. But as I said, I am really blessed to have great colleagues around me all through my career including as of today.

Would you like to share any instance or an experience of your early days in the finance world that’s fresh in your mind even today?
One of the most important episode that stays with me all through was when I met a very old and wise investor who was my first investor in terms of giving me a very large investment running into thousands of crores over a period of time.

When I met him for the first time, bond yields in India had come down from a high of 12-14% to 6-7% and gilt funds, bond funds had, hence, shown remarkable double-digit returns of 15-20% in three to four years of horizon.

When I met him he asked me, “do you think these returns are coming from you or from the market?” Till that question was asked, I used to always think that it is we as a fund house or the team which had generated those returns, but that question provoked me to think deeper. It made me go back to my senior colleagues and ask them what this question means and what its implications are.

That is where the whole concept of market returns and extra returns that we need to generate as money managers came into my mind, and that was the starting point of a very important thought about always asking more questions and right questions in investing. In money management, being independent is very important. Having an independent thought process is very important because most often we invest like a crowd or like a herd and herds in the long term do not make money.

Retaining independence is important, independence comes from asking the right questions and this particular experience sometime in the year 2000 or 2001 was a very important starting point for me in the journey of asking the right questions about anything and everything.

Everyone has a mentor in their life and I am sure you would also have one. Would you like to share something about that person?
I have been really blessed to have worked with some of the most talented in the industry all through my 24 years of working..I learnt a lot from people like Naren, Manish Dangi, Kenneth, Vineet, Atul, then the young colleague recently who has recently joined us Abhishek. In every conversation or our interaction, they leave behind some nuance or some idea which adds to my learning. Whether it is on how to really compound money or how to run businesses by keeping customers first.

I am grateful to some of my early leaders like Pankaj who taught me the value of scale and how to build businesses in any market conditions, how to grow and seek excellence. I learnt a lot from my colleague at

who taught me the power of simplicity and minimalism.

My colleague Rishi who taught me the principles of marketing and how creativity can be used to solve business challenges. My operating principles are those influenced by someone like our iconic Chairman Mr Hemendra Kothari who always tells me that values and integrity comes first since we are in the business of managing other people’s money, one should never do anything that can harm the reputation or interest of our investors.

As I said this has been a brilliant journey of being at the right place surrounded by really great people who have shaped our industry and been a part of this journey and to have progressed to where I am. Thanks to a lot of these influences. Of course, a lot of my learning also came from reading books of money managers around the world, reading books on marketing on advertising. So, these are things that excite me and in a way keep enriching me.

What do you do in your free time when you’re not busy making investment decisions for your clients?
My free time is actually an attempt to free up my mind from thoughts and create empty space, which is technically called meditation, but it’s not very easy to achieve. Doing nothing at times, seeking stillness and of course at times when I just need to unwind or switch off, I pick up my phone or tablet and either watch movies that I have really loved a lot. I watch The Kapil Sharma comedy show.

I hear some old songs of Jagjit Singh, something that I have grown up listening to during my engineering days and fell in love with.

I spend time with my son, he is growing up so I do not get as much time, but whatever little bit of time I get, I talk to him or play cricket with him. So, these are some simple things I do in my free time.

What have been the key learnings during your two-decade stint in this industry?
The key learnings that I have had in all my career over 22 years is that we manage other people’s money, hence, our success cannot come at the cost of someone else’s failure. So, it’s important to have a lot of humility and responsibility in terms of our conduct and how we run our business.

Other things that have really helped me is the thought of keeping things simple.

I feel over time, especially in our industry language, communication etc have become fairly complex and lengthy, and the quest for simplicity and minimalism is what really has helped me in decluttering and keeping things clear. Brevity after all is clarity.

What’s the one piece of advice you would want to give a newbie investor today?
I don’t think I qualify to give advice. I can only say things that have worked for me are being surrounded by good people, being surrounded with great ideas, and learning from others.

There is infinite growth, there are infinite opportunities today for all of us to do meaningful work and to enrich ourselves every day. Stay positive, always seek something good from any conversation or any relationship that you face or confront everyday, and like we say at DSP, do not stop playing, just stay put.

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