In this time of reckoning for debt funds, where dubious choices by some fund houses are being questioned, we must also acknowledge the majority of the fund houses that sidestepped the Essel Group landmine. We spoke to three debt fund managers to understand the process that helped them identify unsuitable investments early enough to stay away or exit before it caused harm to their investors.
Protective covenants
Building in protective covenants and not deviating from processes helped Axis Mutual Fund navigate the share-backed non-convertible debenture (NCD) storm that has hit the debt fund space.
