EQUITY FUND MANAGERS don’t just manage investment for others, they also give hope to lakhs of investors that their hard-earned money will grow safely and provide better returns than other asset classes. Indian mutual fund industry’s AUM was ₹46,71,688 crore at the end of October 31, 2023. It has grown more than five times in 10 years. “As size increases, it becomes tougher to execute,” says Sohini Andani, fund manager at SBI Funds Management Pvt. Ltd. She is the top equity fund manager in Fortune India study this year. Pankaj Tibrewal, executive vice president and fund manager at Kotak Mutual Fund, is second, followed by Sailesh Raj Bhan, CIO-Equity Investments at Nippon India Mutual Fund.

While fund managers follow their own philosophies, certain aspects are common. “Management, their integrity, execution background and whether they have the bandwidth to take the company to a higher level are crucial,” says Andani. Another aspect is capital allocation, she says. “I consider whether the business needs large capital or can grow from internal accruals. Businesses which cannot generate returns higher than cost of capital cannot sustain in the long term,” says Andani. Valuation is important, too, she says.

Second-ranked Tibrewal, who quit Kotak in November, agrees. “We make sure we pick right companies from an upside perspective. Another factor is business itself — whether it is a small fish in a big pond or a big fish in a small pond. The latter is what we get excited about because opportunity to grow is significant there,” he adds. He swears by the Gorilla to King Kong strategy. “We select 50-60 gorillas which pass the filter in management quality, balance sheet, cash flow and return on capital. We don’t know who will become King Kong but a few will reach that stage,” he says.

“We focus on companies with SPG (sustainable profitable growth) run by driven managers and promoters with a long-term view,” says Sailesh Raj Bhan of Nippon India Mutual Fund, ranked third. He says the focus is on getting returns primarily from good stock selection and not cash calls.

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