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The Ant and The Elephants

Ajit Dayal recounts a story from when he launched the Quantum Long-Term Equity fund, the company’s flagship product for Indian investors, 10 years ago.

At the time, he met one of India’s biggest fund distributors and was told that if he wanted investors, he would have to pay a kickback, which would be a measure of how much money Quantum wanted to raise and how long the company wanted to hold on to this cash.

Mr Dayal asked the distributor why he was not interested in the fund’s style or his long-term record. The distributor responded: “You are an ant. The elephants in this industry dance to my tune. What can you do? You can’t change the system.”

Mr Dayal, who used to run a fund for Vanguard during the 1990s and early 2000s, did not pay the kickback. Instead, Quantum decided to bypass the middleman and distribute its funds directly to investors in India, selling products through its own website.-from FT

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