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Fund Managers on the Move

An unusual number of fund mangers have changed jobs to move to other AMCs over the last year. While all this is no doubt great for the fund managers' careers, investors have reason to be more circumspect about the impact.

It seems to be migration season among fund managers in the country. An unusual number of fund mangers have changed jobs to move to other AMCs over the last year. Perhaps booming markets have made AMC managements shift their focus from marketing to performance, at least for the time being.

Nilesh Shah, Director and Chief Investment Officer (Fixed Income) at Franklin Templeton is moving to Prudential ICICI. Shah has run most of Franklin Templeton's debt funds since 1997. Shyam Bhat, who was managing equity and balanced funds at Tata Mutual Fund since its launch in 1995 is quitting and joining Principal Mutual Fund.

In March this year, two equity fund managers, Deepesh Pandey of Franklin Templeton and Anil Sarin of Kotak PMS joined Prudential ICICI Mutual fund. Before Kotak PMS, Anil Sarin was the equity fund manger with Birla Sun Life mutual fund. He managed Birla IT, Birla Equity Plan, Birla MNC and Birla Taxplan 98. Deepesh Pandey was managing index funds, MIPs, balanced funds and the closed-end tax-planning funds at Franklin Templeton.

Early this year, in January, Anil Bamboli, the debt fund manager at SBI joined HDFC mutual fund. He was managing gilt, MIP, income and cash funds at SBI. At HDFC, he is currently the fund manager of cash, short-term and floating rate funds. In September 2003, Chandresh Nigam, the star fund manager of HDFC Equity fund (erstwhile Zurich India Equity) moved to Prudential ICICI, where he currently manages Prudential ICICI Growth fund. He was associated with Zurich AMC since the very beginning in 1994. After Zurich's acquisition by HDFC, he continued to manage HDFC Equity, HDFC Taxsaver and HDFC Capital Builder before joining Prudential ICICI.

In June 2003, another debt manager, Santosh Kamath moved to ING Vysya from HDFC mutual fund. He was managing most of the debt funds at HDFC. The major ones include HDFC High Interest and HDFC Sov Gilt Savings plan. Now, at ING Vysys, he is the fund manager of gilt and liquid fund. In early 2003, Suresh Soni left Templeton and joined Deutsche as Head, fixed income. At Templeton he managed Gilt, MIP, income and short-term funds. Prior to his journey to Templeton, he was a debt fund manager at Sundaram and managed Sundaram Bond Saver till March 2000.

Anoop Bhaskar, who was the equity research analyst with Kothari Pioneer since the very first day of Kothari's operation, has joined Sundaram as Equity Fund Manager in September 2003. After Kothari's (Pioneer ITI) acquisition by Templeton, he continued to work as equity analyst at Templeton. He currently manages Sundaram Taxsaver and Sundaram Select Midcap.

While all this is no doubt great for the fund managers' careers, investors have reason to be more circumspect about the impact. When a fund manager changes, the fund's old track record can become irrelevant. Of course, it remains to be seen how much of a fund's performance is purely due to a manager's skills and how much because of how well that skill is suited to a particular fund's philosophy or an AMC's environment. Investors whose investments have seen a change of fund manager would do well to keep a close eye on performance, specially as the markets turn volatile.

It is interesting to note how this is specially relevant for debt funds. For many years, Indian debt funds were not difficult to manage as the general direction of interest rate movements and yield shifts was predictable. This is no longer the case. Now, rates can move either way and managers have to get their calls right. The difference between bad, average and good debt fund managers is likely to become wider in the coming years.