How EDGE AMC Was Created: Entrepreneurship Is Hard
EDGE AMC Limited, a young mutual fund company, was founded by Ali Imam, Asif Khan, and Khandakar Safwan Saad in 2018 with an ambition to democratize the benefits of investing in the capital market in Bangladesh. The company started with a bold ambition – to take the opportunity to invest in the capital market and thus improve financial condition to common people. This is the story of how EDGE AMC was founded.
The inspiration and the idea
Asif Khan: Ali Bhai joined BRAC EPL in 2009 and he has been thinking about asset management since then. I could remember that he had this idea in 2009 but in order to manifest it, you needed a license and other resources which were not there at that time. He had this plan in 2011 and 2012, but then again, this is a business that you can’t start at will. So Ali bhai had this plan for a long time, but it did not happen for various reasons until 2017 when we finally decided to go for it.
Ali Imam: The main thing is that the long-term investment management that we are talking about is more important for local people than international investors. We realized that there is an opportunity to serve a large number of people who do not have any plan or understanding of investment. It is like showing people iPad which they don’t know about, and then only people realize that they need it.
The critical thing about capital market investment is the return on capital. Everyone who is working on capital market investment, be it a broker, an agent or an asset manager, every one of them is looking to maximize the return of their customers. They want to give their customers a satisfactory return on their investment. And you can ensure an excellent return for your customers, by perfectly aligning interests, through asset management services. That’s why we have taken this initiative.
Putting things together: the long preparation
Ali Imam: We had the first serious discussion about starting an asset management company in 2012 when I went out to IFC and Asif left EPL for Caravel Management LLC. We were much younger. We had the ambition but did not have all the critical resources to get started. One being capital. You can’t start an asset management company without a certain amount of paid-up capital – it is a regulatory requirement. We did not have the track record and network that we have today. These were some of the reasons we could not start at that time. But in 2012, we took a call that we would do something. Between 2012 and 2016, we focused on gathering these critical resources – capital, network and building a track record.
Finally, in 2016 we decided that now we could start with what we have. By the time, we executed some excellent research projects of international standards. We have built a network in the industry. We have worked in some renowned organizations. We have built a reasonable profile for ourselves. And we have built access to some global institutions.
BRAC Bank was EPL’s internal client when we were working at BRAC EPL. We had the opportunity to play an advisory role in BRAC Bank’s capital market investments. We managed that fund till 2017 and it was a pretty big fund. We realized that we have almost everything that we needed to get started. We made a plan and started working on it.
The long road to getting started
Ali Imam: We made the plan in 2016. But we still had some capital requirements that we could not manage. We were three mid-career professionals, we did not have all the capital required for the business. Then we started speaking with some like-minded financial sector investors. Like-minded because there is a philosophical aspect to capital market investment.
You take a philosophical stand when you are making an investment. If someone with a different philosophical perspective joins us, that will lead to some potential challenges in the future in terms of mutual understanding.
At one point in the discussion, we came to realize that we have people in our families who could be part of our journey. That’s how Asif’s uncle Mr. Masud Khan became part of our journey. They are well-known and well-respected in their professions.
We thought that this was the best solution where our family members would come as a financial resource provider and that it would give us the independence that we need to run an early-stage financial institution.
Asif Khan: If you look at the timeline, we completed the company registration process in about July 2017. Asset Management License has some major regulatory requirements. You have to have a certain amount of paid-up capital, take office space, audit your company and so on. After completing all this work, we finally applied for the license in August 2017.
By that time, Ali bhai left his job and started full time here. I joined full time in September. I already left Exotix at that time, but I had a consulting agreement with them. Safwan joined us a few months later because we did not have a license yet.
In February 2018, we got an asset management license. And we launched our first mutual fund in August 2018.
This story is an extract of our long-form interview with Edge founders published in early 2018. Read our complete collection of coverage of EDGE AMC Limited here.
Ayrin Saleha Ria is an undergrad student currently studying Applied Sociology at ASA University Bangladesh. She takes a deep interest in human society and behavioral science and loves reading. She works at FS as a Community Management Fellow and writes about interesting companies.