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Why FY17 saw significant churn in fund managers than FY16

A slew of fund of managers changed jobs in the last one year. However, a prominent fund manager leaving one fund house can be quite a loss for mutual fund investors

ByHimadri Buch

Fund industry watchers are used to fund managers churning their portfolios at a higher-than-normal rate during a bull market.

But over the past one year, the industry has witnessed a different kind of churn: that of fund managers themselves, many of whom have got themselves new jobs.

A prominent fund manager leaving one fund house can be quite a loss for mutual fund investors, who draw comfort from their current manager’s expertise and skill. This is especially is true for those funds which are doing well under the present fund manager.

Regardless, the fund industry's churn can attributed to a number of things.

Head hunting firms said that post demonetisation, lot of money entered the financial services sector leading to more money in the hands of companies, which ramped up hiring.

According to analysts, a significant chunk of equity inflows came from retail participants, while debt inflows swelled as banks were flushed with liquidity and were parking the surplus in debt schemes and liquid schemes of mutual funds.

“Post demonetisation lot of companies have hired many officials in the financial market as larger chunk of cash came in to financial markets opening up more job opportunities in the financial market,” said Sunil Goel, Managing Director at GlobalHunt, a leading recruitment firm.

Concurring Goel’s view another official from a job search portal said, “More inflows means more money to pay fund managers. MF industry got a significant flow from retail participants after demonetisation.”

Industry witnessed fund manager movement in both equity and fixed income segments.

Among equity fund managers, Taher Badshah, Senior Vice President and Head – Equity, Motilal Oswal Mutual Fund quit to join Invesco Mutual Fund as Head – Equities. Badshah replaced Vetri Subramaniam, CIO-equity at Invesco Mutual Fund who joined UTI Mutual Fund as Group President and Head of Equity.

Tata Mutual Fund too had to hunt for equity and debt heads post resignation of CIO Ritesh Jain.

Tata Mutual Fund roped in Quantum Mutual Fund’s head fixed income, Murthy Nagarajan in the same capacity. They also appointed Gopal Agrawal Chief Strategist and CIO at Mirae Asset as CIO-equity.

After working with DSP BlackRock Mutual Fund for little over 18 years Dhawal Dalal, head-fixed income moved to join Edelweiss Mutual Fund as CIO-fixed income.

Axis Mutual Fund too witnessed an exit of its equity head Pankaj Murarka last year.

This trend was also noticed on the sales and marketing front, DSP BlackRock Mutual Fund roped in IDFC Mutual Fund’s Kalpen Parekh as Joint President. Prior to joining, IDFC MF Parekh was managing director and head of sales at IDFC Mutual Fund.

Gaurab Parija, Director, Business Development & New Initiatives at Franklin Templeton India, quit and joined IDFC Mutual Fund as head of sales and marketing. Parija worked with Franklin Templeton Mutual Fund for 16 years.

Among the top level exits, Vikaas Sachdeva, Chief Executive Officer of Edelweiss Mutual Fund moved to ENAM Asset Management in the same capacity.

In FY16, there were merely 3 fund manager movements. Kenneth Andrade quit IDFC Mutual Fund to set up a portfolio management firm and Anoop Bhaskar of UTI MF replaced him. Shreyash Devalkar of BNP Paribas Mutual Fund moved to join Axis Mutual Fund.