About ASK Investment Managers Limited

Business Model of ASK Investment Advisor

A) Overview

Ascend operates as a leading asset and wealth management firm with a specialized focus on annuity revenue rather than transactional broking or lending. As a "pure play" wealth advisor, Ascend follows an advice-led model, emphasizing long- term, stable revenue streams. The company has an open architecture that facilitates growth in both asset and wealth management segments.

B) Key Features of Business Model:

• A diversified product portfolio across asset and wealth management.

• A strong presence in India with over 600 external distributors.

• A global distribution network to expand its client base and assets under management (AUM).

C) Revenue Model

Ascend generates revenue primarily through annuity-based income, with approximately 95% of revenue classified as "sticky" annuity revenue. The firm does not engage in broking or lending, ensuring a consistent and predictable revenue stream.

Sources of Revenue:

• Advisory Fees: As an advice-led wealth manager, Ascend earns fees based on the assets it manages.

• Transaction Fees: While not a broking or lending entity, Ascend does earn fees on transactions.

• Affiliated Bank Distribution: The firm has some dependence on an affiliated bank for distribution, which can create potential conflicts of interest.

D) Management Team

Ascend boasts a seasoned management team with significant experience in wealth and asset management. The leadership team has demonstrated a strong commitment to the company, with high levels of tenure and equity ownership.

• CEO tenure: 15+ years with Ascend.

• Senior Management: Average tenure of 15+ years.

• Industry Experience: Senior management averages ~25 years of experience.

• Industry Experience: Senior management averages ~25 years of experience.

• Employee Ownership: 15% of the company is owned by management and employees, incentivized through a strong ESOP structure.

• Governance: A robust board of industry experts ensures strong governance and strategic oversight.

• Ownership: Backed by a large global private equity manager as the controlling shareholder.

E) Financial Performance

Ascend has demonstrated robust financial growth over the years, showcasing strong AUM expansion, revenue growth, and profitability.

• Total AUM: INR 82600 Cr as of September 30, 2023.

• AUM Growth: 26% CAGR over the last 10 years.

• Revenue Growth: 27% CAGR over the last 10 years.

• PAT Growth: 39% CAGR over the last 10 years.

• Return on Equity (ROE): 27%.

• PAT Margin: 47%.

Future Projections:

• FY24E Estimates:

• Revenue: ~INR 1,075 crore.

• PAT: ~INR 400 crore.

• FY25E Estimates:

• PAT: ~INR 500 crore.

• Historic Growth:

• FY18-23 PAT CAGR: 23%.

• FY18-23 Revenue CAGR: 16%.

• FY13 AUM: INR 12 billion.

© FY23 AUM: INR 974 billion.

F) Risks & Challenges

Despite strong financial and operational performance, Ascend faces several key risks that could impact its business:

* Dependence on Affiliated Bank Distribution: Heavy reliance on an affiliated bank for distribution channels may

create conflicts of interest, particularly with CASA (Current Account Savings Account) products.

* Limited Third-Party Distribution: The asset management division has limited third-party distribution, which could

constrain growth.

* Potential Conflicts of Interest: The company earns transaction-based fees, which may lead to conflicts within its

advisory model.

* Regulatory Challenges: Changes in regulatory policies could impact revenue streams and the overall business

model.

Conclusion

Ascend has positioned itself as a leading player in the asset and wealth management industry with a sustainable, annuity- driven revenue model. Its diversified product portfolio, experienced leadership, and strong financial growth make it a formidable competitor in the sector. However, challenges related to distribution dependence and potential conflicts of

interest need to be managed strategically to ensure long-term growth and stability.