Standing apart from the crowd: Profile of a fund manager

How do you get acquainted to the workings of the markets? Through failures. When your call on an investment goes wrong, your heart burns, not only your finger.

Prashant Jain, chief investment officer of HDFC Asset Management Company that manages Rs 92,625 crore of funds, also is no different.

He suffered his biggest failure early on in his professional years, when he was part of the young team which invested in newly listed companies many of which vanished when the market crashed.

[caption id="attachment_403793" align="alignleft" width="380"] He suffered his biggest failure early on in his professional years. Moneycontrol.com[/caption]

"We were lucky in the sense that right in the early stages of our career, we made mistakes; and those mistakes were made with smaller sums of money," he says in an article in The Economic Times.

"The experience taught us that one should only invest in sustainable businesses." A valuable lesson to learn, that too the hard way. Here are couple of other instances that give a sneak peek into his investing strategy:

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a) "We put reasonable amounts of capital behind our high convictions and ideas; but we're not reckless," he says. A case in point is investment in Crompton Greaves. Even as many dumped their holdings in the company on allegations of governance issues, Jain was quietly accumulating the company's shares.

b) Here is another example. Jain is among the very few fund managers who emerged almost unscathed from the tech bubble burst. The secret? He is not lured by market momentums. "Spotting a bubble is not difficult. What is difficult is to bear the underperformance and the pain in the short to medium term. We did not invest in real estate in 2007 and that year turned out to be really bad for us; we underperformed by almost 7%," he says.

Read the full article here.