Star fund manager Sandip Sabharwal, 34, who had joined the recently launched Lotus Mutual Fund, has put in his papers.
Regulatory issues over his previous job at SBI Mutual spurs exit.
MUMBAI: Star fund manager Sandip Sabharwal, 34, who had joined the recently launched Lotus Mutual Fund, has put in his papers.
Sources in the industry said Sabharwal, who was the fund’s chief investment officer, was asked to resign by Lotus because of certain regulatory issues that had come up against him for his previous assignment at SBI Mutual Fund.
Sources said that some old case related to SBI Mutual Fund dealing in Ketan Parekh’s “K10” stocks during Sabharwal’s tenure is being raked up by the regulators, including the Economic Offences Wing.
Lotus Mutual Fund is said to have wanted nothing to do with the case and wanted to keep its reputation intact.
“Sandeep has cited personal reasons for resigning. We wish him all the best,” a spokesperson of Lotus Mutual Fund said.
The equity team at Lotus had five members including Sabharwal. “We will now have to take a relook at our options,” the spokesperson said.
The fund house had recently filed its application with the Securities and Exchange Board of India, to launch its first equity fund, which was to be managed by Sabharwal.
Sabharwal was with SBI Mutual Fund for 10 years since 1995 and came into prominence in the last couple of years of his tenure there.
In the aftermath of the 2001 stockmarket meltdown, most of the ‘K10’ shares (a market sobriquet for ten stocks including Himachal Futuristic Communications, Silverline Technologies, Global Tele-Systems (now GTL), Aftek Infosys, Pentamedia Graphics, SSI and DSQ Software) that tainted Big Bull Ketan Parekh was allegedly front-running went into a free fall. The SBI Magnum schemes were said to be heavily invested in these shares.
Sabharwal has been credited with single-handedly turning around the fortunes of SBI Mutual Fund during his tenure there, before he left to join Lotus Mutual Fund. He was the manager of the best-performing equity mutual fund in India in 2004-05, having bet on shares of mid-sized companies (in the Rs 200 to Rs 2000 crore sales range) such as Praj Industries Ltd.
As the fund manager of SBI Magnum Tax Gain Fund, he returned 159% in the twelve months to last August, outperforming 1,361 other funds ranked by Bloomberg.
“I liked the management’s vision,” he had told Bloomberg last year, adding that he was attracted to the ethanol sideline as “alternative sources of energy gain in importance with rising crude prices.”
Sabharwal bought shares of Pantaloon Retail at Rs 45 in 2000. He began trimming his holdings when the stock reached Rs 800.
An IIT (Delhi, 1993) and IIM (Bangalore, 1995) product, Sabharwal avoids companies that are event-based or where the performance is linked more to an external environment or government policies.
He regrets not buying Bharti Airtel shares. “I liked the management’s focus and the market opportunity was huge, but I couldn’t see positive cash flows for a long time so that deterred me,” he had told Bloomberg.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}