No, this is not Snow White's fairy tale and there is no Evil Queen asking the Magic Mirror that fateful question. But there is a question that fund houses ask the industry mirror each quarter, and the Mirror's answers make or break many a sales career in our industry. The AuM race used to play out each month - now it plays out each quarter. It's a competitive industry - as it ought to be. Who's growing faster than me, who am I growing faster than : that's a key question that almost every sales and business head tracks. So, what does the mirror on the wall tell us about who's the fastest of them all? We looked at data for calendar year 2014 and split all AMCs into 3 groups to try and get meaningful answers to the question that always remains in every sales head's mind.

Its an exercise most fund houses conduct every quarter, with keen interest. Its an exercise that many say they are not really keen on tracking, but will nevertheless very keenly track every quarter. It's the AuM race we're talking about : who grew faster than me, whom did I beat last quarter? It's a fiercely competitive market among fund houses, and the quarterly pecking order is what keeps sales teams on their toes, all the time.

We did a little number crunching ourselves, and to allow for meaningful analysis, we have clubbed all fund houses into 3 categories:

1. - Leaders - which is the top 10 fund houses by AAuM for the quarter Oct-Dec 14

2. - Challengers - fund houses ranked 11 to 20 by AAuM for the quarter Oct-Dec 14

3. - Aspirers - fund houses ranked 21 to 44 by AAuM for the quarter Oct-Dec 14.

2014 was a big year for the mutual fund industry in terms of growth, with the industry as a whole recording a 26% AuM growth in calendar 2014. Who led growth in each of these packs last year? What did the industry's proverbial mirror tell us when we asked it our question : mirror, mirror on the wall, who's the fastest of them all?

2014 AuM Growth Champions

The Leaders

The top 10 fund houses by AAuM as of Dec-14 form the group we are calling the Leaders. The table above is sorted on % growth in AuM during 2014, rather than the absolute AAuM for the last quarter. We asked our mirror, who is the fastest of them all, not who is the biggest of them all!

FT has done remarkably well, growing assets by 44% during the year, with ICICI Pru coming in a close second with an equally scorching 41% growth. One could argue that FT's higher proportion of equity assets helped overall AuM expand in a bull market and that ICICI Pru's 41% growth on a much larger base, with a larger debt proportion, is a more creditable achievement. There may well be merit in such an argument. Lets just say that both performed splendidly in 2014!

An astounding feature of the industry is that the 2 largest players - HDFC and ICICI Pru - have notched up growth rates of 38% and 41% respectively - which is way above the industry average of 26%. One would normally expect smaller competitors to post higher % growth rates than the leaders - and one certainly does not see many industries where the top 2 players grow so much faster than industry, especially in such a competitive business. Hats off, to both these leaders!

4 fund houses out of the top 10 in the Leaders group, have grown faster than the industry - FT, ICICI Pru, HDFC and Birla Sun Life. Its not easy to be big and yet grow faster in % terms than the industry!

The Challengers

Fund houses ranked 11 to 20 in AAuM terms for the quarter Oct-Dec 14, are clubbed into this category which we call the Challengers. This group too is sorted in descending order of % growth in assets during 2014.

Leading the pack is a rather unusual name - JM Financial. Unusual because its asset growth is perhaps more due to a couple of tactical tax break oriented fund launches that were lapped up by institutional players, and less due to a year round broad based effort.

The 2 big stories in the Challengers group seem to be Axis and Religare Invesco - who have grown by 65% and 45% in 2014. We often hear industry players (outside of the big 4) fret that distributor allocations are going only to the big 4, squeezing out many others in the process. The Challengers group, led by Axis and Religare Invesco seem to be disproving this hypothesis. In fact the group as a whole has grown by 29% in 2014 - faster than the industry average of 26%. Clearly, the Challengers are mounting a serious challenge, and seem to have got distributor and investor attention with their efforts.

JP Morgan is placed rather low in this list, contrary to popular perception that it is on a robust growth path. We understand that the loss of assets in the last quarter was part of a planned strategy to move away from unprofitable business towards more remunerative business, and that this quarter, growth is back on track.

The Aspirers

This group consists of players ranked 21 to 44 in the AAuM pecking order. This group has been ranked on the basis of absolute growth in assets in 2014 rather than % terms, since the group has a wide cross section of players, many of whom have a very small AuM base, which makes % based comparison a challenge.

Goldman Sachs leads the pack here - obviously due to the ETF mandate it won from the Government. 4 other fund houses posted asset growth in excess of Rs.1000 crores each - IndiaBulls, IDBI, BOI AXA and Motilal Oswal. Mirae Asset marginally fell short of the 1000 crore growth mark, but put up a truly commendable show, as most of its growth came through from equity assets. Fund houses like Mirae Asset and Motilal Oswal, in their own ways, eloquently demonstrated during the year that size is not the only consideration for distributors and investors - quality, performance and differentiation do get noticed, irrespective of size.

That said, the overall strife within this group is evident from the fact that the Aspirers collectively grew at a slower pace than the industry - which is not the way it ideally ought to be. Its like saying that small cap stocks in an industry are expected to grow slower than their large cap counterparts. Such an industry is obviously in consolidation mode - which is what we are seeing in the MF business. 2014 has been a year when assets have grown robustly and number of players has shrunk. The leaders of the Aspirers group seem to be delivering a message for others in the group : differentiate based on your core competency, else you risk being seen as a me-too player.

What else from our mirror?

That's all that the mirror on the wall has told us so far. We are going to ask our mirror the same question by asset class. We will come back to you shortly with what it says about who the equity, debt and cash champions were in 2014.

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