Rahul Goswami to join Franklin Templeton India MF as head of fixed income

Goswami’s entry into the fund house marks the closure of all the debts of five of six debt funds that the fund house had suddenly wound up in April 2020 in the wake of the illiquidity crisis that had erupted due to the onset of Covid-19.

In one of the biggest moves in the Rs 40 lakh crore Indian mutual funds (MF) industry seen in recent times, Rahul Goswami, who is presently the Chief Investment Officer (CIO) – Fixed Income at ICICI Prudential MF, is set to join Franklin Templeton India MF as the head of debt funds.

Presently, Santosh Kamath heads the debt funds in Franklin Templeton India MF. An email sent to Franklin Templeton, seeking comments, did not elicit a response. Goswami didn’t answer our phone calls and WhatsApp messages.

Meanwhile, ICICI Prudential AMC has announced that Manish Banthia will take over as the CIO - Fixed Income at the fund house.

Goswami’s joining Franklin Templeton underscores the fund house’s commitment to the Indian business. It also signals that the fund house is leaving its past behind.

Earlier, this week, the MF paid off Rs 39.27 crore to investors of Franklin India Short Term Income Plan (FISTIP). It also paid Rs 138.79 crore to investors of Franklin India Credit Risk Fund (FICRF). Up until now- and including the latest pay-out- Franklin Templeton has paid a cumulative amount to the tune of Rs 27,109.34 crore.

All six schemes have paid more than 100 percent of the schemes' assets under management at the time of winding it up.

What’s more, Goswami’s entry into the fund house marks the closure of all the debts of five of six debt funds that the fund house had suddenly wound up in April 2020 in the wake of the illiquidity crisis that had erupted due to the onset of Covid-19. After this week’s pay-outs, the fund house has extinguished units in five of six debt funds. Only one scheme- FISTIP- would remain.

It is not clear where Kamath is headed. But word on the street is that the fund house would launch a high-risk credit strategy under a PMS (portfolio management services) or AIF (alternate investment funds) division and Kamath would head it.

In an interview that Sanjay Sapre, former President of Franklin Templeton India, had given to Moneycontrol in April 2022, he confirmed the fund house’s intentions to explore an AIF / PMS division for such funds.

“A lot of wealth and money from family offices and high net-worth individuals has been investing in AIFs and PMSs. The allocations to traditional fixed-income investments have been coming down. There is a demand for credit strategies in the fixed-income space through the AIF structure. We will certainly consider entering this space sometime because obviously, we have credit expertise in-house. Does that mean Santosh (Kamath) will go there? That is a very future structural discussion,” Sapre had said at the time.

Moneycontrol couldn’t get any official confirmation about Kamath’s future with the fund house. But in most likelihood, Kamath would head the AIF division’s debt funds.

Goswami’s addition to Templeton MF also signals a turning point in its debt fund strategies. As opposed to the credit strategy (a high-risk fixed-income strategy where the fund manager invests in low-rated but hopefully well-managed companies, in the hope to make a gain when credit ratings get upgraded) that Kamath was used to running across many debt funds, Goswami is conservative and is known to pick high credit rated securities.

ICICI Prudential AMC is also known to take credit risks occasionally but in a measured way. Goswami is an experienced hand in the Indian fixed-income markets. Having worked in Franklin Templeton between October 2002 and July 2004, he came to ICICI Prudential AMC and worked there between July 2004 and November 2009.

He left the fund house to work at Standard Chartered Bank for three years and then came back to ICICI Prudential AMC towards the end of 2012.