CXO Conversation
“We would be the eleventh-best option on a screen that sorts by expense ratio.”
Chief Executive Officer, Arka Capital
Arka Capital’s chief executive on why she will not chase direct-platform flows, what a tier-two distribution network actually buys, and the case for measuring an asset manager on holding period.
Transcript
- ClubCXO
- Every competitor is investing in direct platforms.
- Lakshmi Venkatesan
- And they should, because they have brands that survive being sorted by expense ratio. We do not. On that screen we are the eleventh-best option and the honest answer is that an investor choosing on that screen should not choose us.
- ClubCXO
- So what does the network buy?
- Lakshmi Venkatesan
- Holding period. Our investors stay through drawdowns at a rate the industry averages do not touch. There is a person in the same town they can call in March when the market has fallen eleven per cent, and that person talks them out of selling. That is worth more than the basis points it costs.
- ClubCXO
- Can you prove it?
- Lakshmi Venkatesan
- We publish it. Not because we are unusually virtuous but because it is the only number that makes our cost structure defensible, so we have every incentive to.