After his 19 years stint at the fund house, the veteran fund manager has resigned from HDFC
22-Jul-2022 •Chirag Madia
Prashant Jain, one of the most celebrated and longest serving fund managers in the Indian asset management industry, has resigned from HDFC AMC after his 19 years stint at the fund house.
Mr Jain, who was a Chief Investment Officer (CIO) at HDFC AMC, started his money managing work from SBI Mutual Fund and then moved to 20th Century Mutual Fund, which was later acquired by the Zurich Mutual Fund.
Prashant Jain holds a bachelor's degree in technology from Indian Institute of Technology, Kanpur and a post graduate diploma in management from Indian Institute of Management, Bangalore. He was appointed as the CIO at HDFC AMC in 2004 - a year after joining the fund house.
Prashant Jain used to manage three funds namely, HDFC Flexi Cap Fund, HDFC Top 100 Fund and HDFC Balanced Advantage Fund, collectively managing Rs 89,500 crore.
The Balanced Advantage Fund was launched as Centurion Prudence Fund in January 1994 and was renamed to Zurich India Prudence Fund and then to HDFC Prudence Fund. The name was last changed to HDFC Balanced Advantage Fund in June 2018.
From a small beginning of Rs 35.5 crore in assets in February, 1994, HDFC Balanced Advantage Fund has become one of the largest balanced advantage funds in India with an AUM of over Rs 43,000 crore. The fund has given returns of 17.87 per cent since its inception.
Prashant Jain's strengths lies in navigating the schemes through various market cycles with a disciplined approach to investing and always having long-term focus in mind while managing investors' money.
HDFC Top 100 Fund, launched in October 1996 and managed by Mr Jain from January 2002, has given returns around 21 per cent CAGR as against 16.56 per cent of Sensex TRI. Even HDFC Flexi Cap Fund (erstwhile HDFC Equity) has rewarded investors with returns of 20.74 per cent since Mr Jain started managing the fund in June 2003.
One of the major traits of Mr Jain while managing money was to have unshakeable belief in his stock picks and not be perturbed by the noises in the market. Some of the bets which Prashant Jain took in his three-decade old career can be a case study on how to stay away from sectors which are overheated.
Prashant Jain has managed to avoid big disasters when several other fund managers were playing with the momentum in the market. Amidst the height of the tech bull market in the late 90s, Mr Jain started selling IT stocks in 1999 which caused pain in the short run, but as the IT bubble burst in early 2000, Mr Jain was relieved, which lead to immense gains in subsequent years for his investors.
Similar story was also witnessed in 2007, when he stayed away from real estate stocks. Again, short term returns were impacted, but returns in following years were quite strong.
But there was also a period of underperformance for Prashant Jain's funds due to his resolute investment style. His previous calls of investing in some public sector undertakings (PSUs) did not work for several years. But in the last few months, the theme has started playing out and the funds have rewarded.
In the last one year, all the three funds managed by Mr Jain have ranked among the top funds in their respective category. To give an example, HDFC Flexi Cap Fund has given returns of 14.94 per cent in the last one year as compared to the category average of 4.56 per cent.
With the exit of Prashant Jain from HDFC, there will be big shoes to fill for the next rungs of fund managers at the fund house. However, investors should not be overly concerned as HDFC AMC has a pedigree of experienced and competent fund managers like Chirag Setalvad and Gopal Agrawal at its helm.
HDFC AMC, in its announcement on stock exchanges, stated that they have appointed Chirag Setalvad as Head - Equities and Shobhit Mehrotra as Head - Fixed Income. Both will be reporting to Navneet Munot, Managing Director & CEO of the fund house. Future course of action from Mr Jain is not yet known.