Moneycontrol Pro Panorama | Prashant Jain: The Last Rockstar

The maverick fund manager oversaw investments of over Rs 4 lakh crore at HDFC Asset Management Co and directly managed a quarter of those assets

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If you had invested Rs 1,000 in the Centurion Prudence Fund in January 1994, and stuck with the investment, it would be worth close to Rs 100,000 now. A 100 times return in 28 years, or a compounded annual growth rate of 17.87 percent.

Of course, the Centurion Prudence Fund doesn’t exist. It has metamorphosed into what is now the HDFC Balanced Advantage Fund. Its fund manager Prashant Jain, one of the poster boys of the mutual fund in India and among the longest serving, has hung up his boots, Moneycontrol reported today.

Jain oversaw investments of over Rs 4 lakh crore at HDFC Asset Management Co and directly managed a quarter of those assets.

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A value investor, part of his cult status can be explained by his performance. The almost 100 times return in HDFC Balanced Advantage Fund, for instance, compares well to the approximately 20 times rise in the Sensex over this period.

Read a well-rounded profile of Jain and what shaped his investing style here.

In some ways, Jain was the last man standing among fund managers of his vintage. His peers such as Madhusudan Kela, Sunil Singhania, and Kenneth Andrade have gone on to start their own portfolio management schemes (PMS). Others such as Nilesh Shah, Navneet Munot and Chandresh Nigam went from active investment management to become chief executive officers at mutual fund companies.

His leaving HDFC marks the end of an era, not only from his personal point of view, but also perhaps for the mutual fund industry — we might not see the emergence of many superstar fund managers who will establish a track record over such a long period.

Why is that?

It has become more difficult to sustain market-beating returns year after year. Active fund managers don’t have it easy with the rise of low-cost passive funds that are increasingly popular and algorithms, particularly in the large-cap space.

We are seeing more ups and downs in the performance — even Prashant Jain copped some flak when his conviction picks didn’t do so well between 2017 and 2021, when the growth investing style dominated. But value did make a comeback and Jain’s fund has done well in recent times, so he is leaving on a high.

Lastly, CEOs fear disruptions when star fund managers leave. Look at HDFC AMC’s stock price — it was down by as much as 3 percent when the broader market is up.

But rockstars never retire. Jain, too, is likely to start his own PMS.

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Ravi Krishnan
Moneycontrol Pro