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Prashant Jain has quit HDFC Mutual after 28 years of service. On February 2022, he has completed 28 years managing the HDFC Balanced Advantage Fund (earlier known as HDFC Prudence fund), which is a record in India and a rare occurrence even globally.
Notably, Prashant was the CIO of the fund house for the last 19 years. In its regulatory disclosure, HDFC MF said, "Prashant Jain, Chief Investment Officer of the Company after 19 years has decided to move on and has tendered his resignation to the company."
Prashant started his career with SBI Caps after passing out from IIM Bangalore in 1991. Interestingly, equity research was not a preferred career choice for him then. Luckily, he joined mutual fund division of SBI Caps (SBI MF now) in an equity research role. Later, he moved to set up 20th Century Mutual Fund in January 1994 and launched two schemes - Centurion Prudence Fund and Centurion Quantum Growth Fund.
In 1999, 20th Century Mutual Fund was acquired by Zurich Financial services and it was renamed Zurich India Mutual Fund. Centurion Prudence Fund was also renamed Zurich India Prudence Fund. Finally, in 2003, HDFC Mutual Fund acquired Zurich India Mutual Fund and thus, Zurich India Prudence Fund eventually became HDFC Prudence Fund. The same Fund was merged with HDFC Growth Fund and was renamed HDFC Balanced Advantage Fund as a result of the reclassification of mutual fund schemes proposed by SEBI some time back.
Notably, Prashant also holds a record of generating alpha. According to the Morningstar report released on February 2019, the fund has generated alpha at a CAGR of 9.54% since inception and 8.22% in the last 20 years. (The fund is benchmarked against S&P BSE Sensex since there was no relevant benchmark then). Globally, only two-fund managers Peter Lynch and Anthony Bolton have generated alpha of such high magnitude.
As the CIO of the fund house, Jain oversaw AUM of over Rs. 4 lakh crore (as of first quarter of FY 2023). Additionally, he was also directly managing the fund house's flexicap fund, balanced advantage fund and top 100 fund. The total AUM of these three schemes has reportedly crossed Rs. 1 lakh crore, making Jain the first fund manager to achieve this feat.
Dhruv Mehta of Sapient Wealth believes that Prashant may be the only fund manager in the world who has managed a single fund for 28 years. “I still remember meeting Prashant when he was with 20th Century Mutual Fund in 1994. He has seen the MF industry from scratch and cycles of outperformance and underperformance. One of the best things about him is that he is very approachable and very soft spoken. I wish him all the best on his future endeavour.”
Hemant Rustagi feels that exit of Prashant has clearly created vacuum in the industry. “Prashant has a track record of 28 years. His exit has clearly created a vacuum in the industry. One thing that I liked about Prashant is his strong conviction on what he does. He always held businesses only if he is convinced about it.”
At present, HDFC Mutual Fund has appointed Chirag Setalvad as Head - Equities and Shobhit Mehrotra as Head-Fixed income. They will be reporting to Managing Director & CEO Navneet Munot, the AMC said.
Setalvad has been part of the investment team at HDFC AMC since inception, except for a brief stint of 2.5 years outside the company between October 2004 and March 2007. Mehrotra has been with the company for over 18 years and is presently managing few fixed income schemes.
