‘The quality of portfolio in our small cap fund is good’ | business | Hindustan Times
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‘The quality of portfolio in our small cap fund is good’

business Updated: Apr 14, 2011 23:22 IST
Sandeep Singh
Sandeep Singh
Hindustan Times
Highlight Story

After L&T Mutual Fund acquired DBS Cholamandalam AMC in February 2010, the fund house has expanded its footprint to 56 locations from 19 and has almost tripled its headcount to 304. Under its CEO Sanjay Sinha, it has grown its assets under management (AUM) by R1,518 crore (sixth highest in absolute terms over last one year) and while it has AUM of just R4,029 crore, Sinha plans to complement the strong brand with good performance to make it to the big league. Excerpts:

What is the group’s expectation from the business?

The fact that we are sponsored by a leading corporate entity, the idea would be to be in leadership space. But it can’t happen overnight. We will focus on retail and that was the reason we expanded from 19 to 56 locations and get footprint in geographies having significant funds presence.

How do you see the acceptance of this brand?

The L&T tag has opened more doors but at the same time this brand name needs to be supported with performance. To get acceptance from investor or distributor, you need combination of a brand that evokes trust and performance to complement it.

Your small cap fund is lagging a lot against its peers. Are you working on it?

The quality of portfolio in our small cap fund is good and while it may stand the test of quality, it may not have measured up to the standards of performance. We have to see whether portfolio needs to be tweaked or we need some sectoral changes but we won’t compromise purely for short-term gains.

What has worked well for large cap and mid cap funds?

In September 2008, we had exposure to 220 stocks and we brought it down to less than 150 stocks across 11 portfolios — a conscious strategy that worked for us. We have scaled up our research team and have replicated processes useful for fund managers to manage and control performances.

Your view on the markets.

Concerns are in the short term because of headwinds such as — high crude prices, debt related issues in EU. These will not impact in the medium to long term and there will be strong rallies.