Marcellus Ventures into Mutual Funds

Marcellus Investment Managers Pvt. Ltd., co-founded by Pramod Gubbi, is making a significant move into India's expansive mutual fund industry, valued at ₹81 lakh crore. This strategic shift indicates a departure from focusing exclusively on ultra-high-net-worth clients, aiming to widen their market base.

Pramod Gubbi, a seasoned institutional sales and research professional, is leading this initiative. His background in sales and marketing is expected to play a pivotal role as Marcellus navigates the competitive landscape of mutual fund distribution in India. The company has already received an in-principle approval from the Securities and Exchange Board of India (Sebi) for setting up its asset management company.

With an initial investment of ₹80 crore planned for the mutual fund business, Marcellus is also looking to recruit a skilled investment and compliance team. This move is especially timely, as the Indian asset management space is crowded, with many recent entrants opting for partnerships rather than establishing standalone entities.

The challenge for Marcellus lies in penetrating a market dominated by established players, where the top 10 fund houses control over 80% of the industry assets. New entrants often struggle to gain shelf space among mutual fund distributors and banking platforms. However, Marcellus believes its established brand equity in the portfolio management services sector will help it overcome these hurdles.

Currently, Marcellus's PMS products require a minimum investment of ₹50 lakh, which limits access to wealthy families and family offices. By obtaining a mutual fund license, the firm can attract retail investors with lower ticket sizes, potentially starting from ₹250. This could significantly broaden its reach and capture the growing systematic investment plan (SIP) flows, which saw substantial inflows recently.

While the mutual fund foray represents a diversification strategy for Marcellus, it comes at a time when its PMS business is facing challenges. The total income for the financial year ending March 2025 dropped by 32%, indicating the need for this strategic pivot. Marcellus aims to leverage its strengths to tap into India’s booming mutual fund market and achieve sustainable growth.