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INVESTING Ten Fund Managers Who Rock And Roll An assorted bunch this. Eight managers of equity funds and two managers of debt funds emerge as India's finest fund managers. Seven of them are established stars, and three are on their way there, but all of them share some common traits. With uncommon wisdom they've picked the right investments at the right price, and often bucked the trend. By Roshni Jayakar SAMIR ARORA
He won't go out and say picking stocks for a fund is akin to choosing an used car from a lot that has more than its share of smooth-talking salesmen, but his choice of metaphor does: ''(It involves) a lot of kicking the tyres.'' Read lot as about 75; that's the number of companies Arora has visited every year since 1993, when he moved to Alliance's Asia operations. ''The only way we can know of a company's progress is by keeping in close touch with it,'' says Arora who studied engineering at IIT Delhi, and finance management at IIM Calcutta and UPenn's Wharton School. Today, as head of the Alliance's emerging markets practice he is based in Singapore. ''He has his ears to the ground and has been able to spot stocks early, grab an opportunity, ride the wave, and get out at the first whiff of bad news,'' says a Mumbai-based investment consultant. Allowing for the usual hyperbole one would associate with anything related to the stockmarket, that's a fair call. Arora picked Zee Telefilms in June 1995 when the scrip wasn't exactly in fashion. And he exited it well before it hit its (prolonged) trough. He also picked HFCL in September 1999, when the stock was languishing and sold it in February 2001. In both cases, he got in cheap, and managed to time his exit just right. And as early as December 1997, Arora picked Digital Equipment and stuck with it; today, the scrip is a market favourite. Tech may be a four letter word today, but Arora's faith in the sustainability of the business models of the country's software biggies remains unshaken. He has also made successful calls on Infosys and HDFC Bank over the past three years: that's reason enough to include him in this roster. BHARAT SHAH
Investors may not know this, but Bharat Shah-no relation to the diamond-trading film financier who is in all sorts of trouble-was the original king of good times. The twice-over accountant-he has qualified in both the chartered and cost streams if that's relevant-has seen his record sullied some by the great tech meltdown: over the past one year, the Birla Advantage Fund has posted negative returns. That, and Shah's now tempered obsession with tech stocks are perhaps the only chinks in the armour of a fund manager who believes in long-term positions. Tech stocks still account for the single largest chunk of Birla Advantage portfolio, 27 per cent, but Shah has a convincing explanation for that. ''Nothing has changed to take away the competitive advantage of the software sector in the long-term.'' And in the unlikely event it has, Shah has hedged his bets by picking pharma hotshops like Cipla, Pfizer, Sun Pharma, and Dr Reddy's Laboratories, and traditional favourites like Reliance and Tisco. He has also moved out of the habit of picking promising mid-cap (medium market capitalisation) stocks. The born-again conservative may not exactly rock when the good times come calling again, but he won't do too bad by investors either. K.N. SIVA SUBRAMANIAN
If there were any doubts at all about the inclusion of Siva Subramanian in this listing, they should vanish with his articulation of the strategy he plans to adopt while picking technology stocks: ''I am waiting for the right valuations to increase my exposure to the sector.'' Attaboy Siva. But then, this fund manager's approach has always been tinged with conservatism. An engineering grad from rec Jaipur and an MBA from IIM, Calcutta, Subramanian joined Kothari Pioneer in 1993. Since then, his investing strategy has been distinguished by a trademark characteristic: the need to find a balance between growth and value.
That could explain the presence of public sector performers like BPCL and HPCL, banking and financial services majors like HDFC and ICICI Bank, and old economy heavyweights like Tisco in the portfolio of Kothari Pioneer Bluechip and KP Prima Plus. The investment in PSUs, for the record, paid off well last year. But Subramanian isn't a stick-in-the-mud prejudiced against happening sectors: apart from staple tech stocks, his picks include pharmaceutical companies, but only the Indian arms of transnationals, which could benefit from any dilution of the price-control regime, like Pfizer and Hoechst Marion, or local companies with strengths in R&D and exports like everybody's favourite pharmaceutical company of the year, Cipla. That's as prudent as you can get. DILEEP MADGAVKAR DESIGNATION:
Chief Investment Officer, Prudential ICICI Mutual Fund
The emphasis on procedure, and the discipline of analysing investments from the risk-return perspective is perhaps a fallback to the days when Madgavkar, a chartered accountant by training, worked in the treasury department of banks like Bank Am and ANZ Grindlays. Madgavkar claims tech stocks will continue to deliver, but this is belied by the fact that there is only one representative of this genre, Digital Equipment, among the top ten holdings of Prudential ICICI Growth Fund. ''We look at momentum plus fundamentals,'' says Madgavkar, explaining why the fund's portfolio doesn't have many stocks that are momentum plays. If it's a thinking man's fund manager you're looking for, you can't get better than this. SHYAM BHAT
What better way to introduce Shyam Bhat than to mention the fact that he is the fund manager who picked the Bajaj Auto scrip in March 2001, believing that the company would do better this year -partly by selling more motorcycles and partly, by embarking on an aggressive cost cutting campaign. The two-wheeler major is actually one of Bhat's more contrarian calls. He has otherwise been content to stick to established stocks and focus on consistent returns. Why, even at the peak of the tech-boom, Tata Pure Equity's exposure to software stocks was just 35 per cent (it is 15 per cent today). An engineer from Mumbai's Victoria Jubilee Technical Institute and an MBA from the city's Narsee Monjee Institute of Management Studies, Bhat's strategy is to seek out fast-growth companies that come at the right price. Tech stocks fall neatly into that framework now. Says Bhat: ''The valuations appear to be in line with revised lower earnings and the infotech sector should see a revival by the third quarter.'' Between the lines there is the indication that Bhat thinks now is the perfect time to buy infotech stocks. 1 2 |
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DESIGNATION:
Head, Asian
Emerging Markets, Alliance Capital
DESIGNATION:
Chief Investment Officer, Birla Sun Life Mutual Fund
DESIGNATION:
Fund manager, Kothari Pioneer
Fine, Brando was a method actor, but ever
heard of a method fund manager? Yet, that's exactly what one of his peers
who'd rather stay anonymous calls Madgavkar. Last year, the competitor
elaborates, when most fund managers were off cement, Madgavkar invested in
the sector after an analysis that showed that the fundamentals of most
cement companies were sound, the future looked rosy when seen in the light
of a cartel that would help firm up prices, and only good could come from
the consolidation-drive then on. Madgavkar will tell you that his
methodology involves looking at what he calls the five Cs-competitiveness,
credibility, corporate governance, concern for small shareholders, and a
combination of tangible and intangible assets. Method apart, Madgavkar
also believes in meetings: he and his team have an internal target of
meeting 200 companies this year.
DESIGNATION:
Fund
Manager, Tata Mutual Fund