InvestorQ : How would you sum up Prashant Jain’s stint as the CIO of HDFC Mutual Fund?
Deepa Salunkhe made post

How would you sum up Prashant Jain’s stint as the CIO of HDFC Mutual Fund?

Arya Nanda answered.
2 weeks ago

Should the exit of an individual really impact the performance of a fund. After all, most of us grown up hearing that organizations are bigger than the people who work for it. In a sense, that is true, and we have seen ample evidence of that in the fund management industry itself. For instance, many iconic names in the past have come and gone but funds have grown persistently. Today, the AUM of mutual funds stands at whopping $500 billion. It is in this context that one needs to look at what happens to HDFC Mutual Fund after Prashant.

In face, after Navneet Munoth succeeded Milind Barve as the CEO of HDFC Mutual Fund, the exit of Prashant Jain was always expected to happen. It did finally happen, albeit more than a year after the change in the top management at HDFC Mutual Fund. For the fund, Prashant jain was more than a CIO, because was the brand ambassador of the fund for a very long time. Prashant exits at a time when the HDFC funds have not been too great in terms of market performance and has also been going down in the AUM sweepstakes.

For now, Chirag Setalvad will head equities at HDFC Mutual Fund while Shobhit Mehrotra heads debt and both will report into Navneet Munoth. It remains to be seen if HDFC MF really opts for a full-time CIO. However, it must be said that most industry insiders share a feeling of awe with respect to Prashant Jain. Fund manages vouch for his ability to think out of the box while industry insiders vouch for his indepth understanding of most industires. He also brought a deep ability to visualize how businesses would transform and evolve.

In a sense, Prashant Jain’s exit after nearly 3 decades marks the end of an era. An era where conviction in fundamental investing was the mantra of old times like Vivek Reddy, KN Sivasubramanian, Bharat Shah, Basudeb Sen etc. More importantly, Prashant never allowed his image to be sullied in an industry where maintaining reputations is never easy. Prashant did create benchmarks in the fund management industry for performance consistency, team stability, value approach and strong conviction. It was all about deep futuristic bets.

To play devil’s advocate, Prashant was human too. He had his share of bad investment decisions like the big bet on infrastructure sector post GFC or the ultra-bullish approach to PSU banks around 2015. These two stories never really materialized to his liking, and even if it does in the future, he may not be around at the fund to cherish the outcome. However, at the end of the day, his funds generated 17-20% CAGR over 20-25 years. When your performance talks so loud, you can surely afford to be a reserved person.