In spite of the AUM growing the revenue of the AMCs have stagnated. The increase in AUM is not trickling into the bottom line. All of the AMCs have great ROEs. This is attracting huge investments, leading to patient money back newcomers. To top it, we have a regulator who has taken a tough stance on the expense ratio. The influx of all the new players will keep a tight lid on the margins and growth of the incumbents. Which is eerily reminiscent of the classic capital cycle that has played out in all industries. The industry as a whole will grow, the end customers will benefit the companies will fight to protect their market share and hence the shareholders of the companies will make little.
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