January 30, 2023
HDFC's Prashant Jain 
(Image credit: Suneesh Kalarickal)

HDFC’s Prashant Jain
(Picture credit score: Suneesh Kalarickal)

On July 22, 2022, Prashant Jain, Government Director and Chief Funding Officer (CIO) at HDFC Asset Administration Co Ltd, resigned and stepped down from his function. He’s 54.

His function of CIO will now be break up as per the succession plan that HDFC AMC communicated to the BSE. Chirag Setalvad, who’s at present a senior fairness fund supervisor and has been with the fund home since 2007, will take over as the top of equities. Shobhit Mehrotra, the fund home’s senior-most fastened revenue fund supervisor, will take over as head of fastened revenue funds.

For business insiders although, Jain’s exit was solely a matter of time. Jain has been with the fund home for 19 years for the reason that day HDFC AMC acquired erstwhile Zurich India Asset Administration Co Ltd. He was the CIO at Zurich India earlier than the acquisition. Jain spent 10 years at Zurich India, making it a complete of 29 years with out switching jobs.

However for a number of years now, Jain and his former boss Milind Barve who retired final yr, have been attempting to convey extra depth to fairness fund administration.

Increasing fund administration
“Proper from the time Milind Barve was round — and underneath the steering of Jain — the fund home had put collectively a plan to result in totally different kinds of fund administration into the home,” says an individual near the developments who didn’t want to be named.

Since round 2020, the fund home has added not less than 4 new fund managers in its workforce. Gopal Agrawal, the erstwhile CIO – Fairness and Chief Strategist at Mirae Asset World Investments (India), was most likely its most high-profile addition when he joined the fund home in July 2020. Agrawal had spent near 10 years at Mirae, adopted by quick stints at Tata Asset Administration Co Ltd and DSP Funding Managers. Agrawal was among the many oldest workforce members at Mirae and performed a key function in turning across the fund home’s fortunes after the fund home almost collapsed following the 2008 credit score disaster.

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Srinivasan Ramamurthy and Amit Ganatra had been the opposite two fund managers who joined in 2020. Whereas Ramamurthy got here from Mahindra Manulife Funding Administration Ltd, Ganatra got here from Invesco Asset Administration (India) Ltd. The fund home additionally elevated two of its analysis analysts, Anand Laddha and Rakesh Vyas, as fund managers. Laddha manages HDFC Banking & Monetary Providers Fund. Vyas manages HDFC Housing Alternatives Fund. Laddha has been with the fund home since 2006 and Vyas since 2009.

Late final yr, HDFC AMC employed one other fairness fund supervisor, Roshi Jain. She was earlier with Franklin Templeton Asset Administration (India) Pvt Ltd the place she spent near 17 years. The hiring continued. Extra not too long ago, the fund home bagged one other huge title; Rahul Baijal, who was earlier a senior fund supervisor at Sundaram Asset Administration Co Ltd the place he spent shut to 6 years.

“Though HDFC AMC’s current fund managers have all the time had the liberty to select and select their shares, many would, in a method, find yourself following Jain’s footsteps. Now, with the brand new crop of fund managers and a change of guard, the range in administration would hopefully be extra pronounced and evident,” says a second particular person who additionally didn’t want to be named.

To make sure, a few of the fund managers had been additionally replacements. Vinay Kulkarni, a senior fairness fund supervisor on the fund home and an old-timer there, left the fund home in 2020. Ganatra left earlier this yr, whereas Miten Lathia, one other fund supervisor, left in 2020.

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On the similar time, the fund home has bolstered its analysis workforce. Between 2019 and 2020, the fund home added not less than 5 analysis analysts, as per an evaluation of the addendums issued by the fund home on its web site between April 2020 until date.

Going past marquee schemes
Though HDFC AMC is India’s 3rd largest fund home with 26 fairness funds, only a handful of them had been fashionable. The three funds that Jain managed (HDFC Flexi Cap Fund, HDFC High 100 and HDFC Balanced Benefit Fund) and those that Setalvad managed (HDFC Mid-Cap Alternatives Fund and HDFC Small-Cap Fund) had managed to herald numerous buyers over time.

HDFC Taxsaver Fund too has remained one in all its extra fashionable funds.

Practically 71 % of its whole fairness property lie in simply 5 of its largest fairness funds. HDFC Balanced Benefit Fund, the fund home’s largest equity-oriented scheme with property underneath administration (AUM) of Rs 43,079 crore, falls within the dynamic asset allocation class.

The problem nonetheless, was to get buyers into the remaining 19 schemes. It’s right here that the various administration kinds of fund managers performed the deciding function.

Take the case of Agrawal. He now manages HDFC Dividend Yield Fund (HDYF), HDFC Massive and Mid-Cap Fund (HLMF), HDFC Multi-Cap Fund (HMCF) and HDFC Capital Builder Worth Fund. Agrawal has managed to show round all these funds in a brief time frame.

As an illustration, in 2019, HDFC Centered 30 Fund (HF30) — a fund that Agrawal used to handle until not too long ago — had misplaced 15 %, in comparison with the class common lack of 7 %. In 2021, the scheme returned 40 %, towards a class common of 31 % and its benchmark index’s return of 32 %. Now Roshi manages HF30. Between 2018-2020, HLMF underperformed class averages and benchmark indices. Agrawal turned across the scheme and outperformed each, class averages and benchmark indices.

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The brand new crop of fund managers doesn’t simply include a great previous monitor report, but in addition totally different administration kinds. Whereas Setalvad is thought for his mid- and small-cap picks, Agrawal is thought for his sharp evaluation of macroeconomics. Roshi is thought for her worth type of fund administration and the newly-joined Baijal is thought for his large-cap picks.

Setalvad and Mehrotra are long-timers and apparent decisions for the fund homes to take cost of fairness and glued revenue funds, respectively. Setalvad started his mutual fund administration profession at HDFC AMC in 2000 when the fund home launched, and labored there until 2004. He then labored at a US-based personal wealth supervisor until 2007, after which he returned to HDFC AMC and has been there ever since. Mehrotra, too, has been with the fund home since 2004.

Current buyers should keep invested in HDFC AMC schemes as the brand new crop of fund managers are well-equipped to take over the mantle. Earlier at present, Moneycontrol has learnt that Gopal Agrawal and Anil Bamboli will now handle HDFC Balanced Benefit Fund, Rahul Baijal will take over HDFC High 100 Fund and Roshi Jain will take over HDFC Flexi Cap Fund. 

Moreover, Srinivasan Ramamurthy will resolve the asset allocation portion of HBAF. Ramamurthy focuses on managing asset allocation funds ate HDFC Mutual Fund, and he’ll get to resolve how a lot HBAF will put money into fairness and debt. In easy phrases, HBAF will now have three fund managers.