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Should I exit L&T Mutual Fund since it is being acquired by Blackstone?

Here is Dhirendra Kumar's advice for the investors of L&T Mutual Fund

I read that Blackstone is acquiring L&T Mutual Fund. How will it affect investments in the fund? Should I exit the fund?
- Sandeep

Yes, this has been talked about for a while. However, the management has denied it many times. In fact, L&T Mutual Fund was itself created following the acquisition of Cholamandalam Mutual Fund and Fidelity Mutual Fund. So, I would say that sometimes these changes are for the better, sometimes these changes are for the worse. But the continuity of the fund manager is a critical thing.

When Fidelity funds were acquired by L&T AMC, I had concerns because L&T Mutual Fund was acquiring all the funds under its management, but the equity fund managers were not coming over. Nevertheless, L&T Mutual Fund was able to attract other good fund managers and did a reasonable job.

So, wait for it. You don't need to act on every action. The mutual fund business is a people's business and if a fund company is put on the block, there could be anxiety, issues and concerns about the future owner, as well as the management.

I'm little comfortable with L&T asset management company simply because its parent company, L&T, is management driven and not led by one owner. I hope that any change in the control of the asset management company will provide continuity of fund management. Otherwise, it will not be worthwhile for a private equity investor to acquire a company without its people. Had it been a bigger company acquiring L&T to merge or to acquire, that could have led to a lot of turbulence and changes. But in this case, the company is likely to be acquired, along with all its people, because the company will be worthless without its people. So, I don't think you need to really act in a huff.

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