The new rules framed by the Securities and Exchange Board of India (SEBI) mandating that Mutual Funds disclose the remuneration paid to the fund managers and other top brass has not gone down well with the mandarins of the mutual funds.
Sundeep Sikka, the head honcho of Reliance Mutual Fund, voiced the irritation of the mandarins when he tweeted “Too frequent & disruptive regulatory changes for MF distributors can have a very negative impact on growth of AMC industry itself.”
Too frequent & disruptive regulatory changes for MF distributors can have a very negative impact on growth of AMC industry itself.
— Sundeep Sikka (@sundeepsikka) March 21, 2016
Sundeep Sikka was supported in his view by Aarti Krishnan of Hindu Business Line who opined that “Too Much Info as bad for MF investors as too little!”
@sundeepsikka @drnarendranET @NagpalManoj @dhirendra_vr Yes Too Much Info as bad for MF investors as too little! #killingwithTMI
— Aarati Krishnan (@AaratiKrishnan) March 21, 2016
While a few mutual funds have complied with SEBI’s directive in letter and spirit and disclosed the information without any reservations, many are making it as difficult as possible for nosey parkers to access the information.
PPFAS Mutual Fund is the most transparent of the lot. Neil Parikh, its top brass, readily shared the link for the compensation paid to the fund managers.
@invest_mutual @SIP_Seller @NagpalManoj we at @PPFAS have transparently disclosed without any passwords etc. https://t.co/SiEFOKHGTJ
— NEIL PARIKH (@npparikh6) May 1, 2016
A peek at the link reveals that Rajeev Thakkar, the CIO of PPFAS MF, takes home Rs. 1.24 crore while Neil Parikh, the CEO, takes home only Rs. 33.62 lakh. Swapnil Walimbe, the CCO, takes home Rs. 26.10 lakh.
Peerless Mutual Fund is sailing in the same boat as PPFAS with Rajiv Shastri, its CEO, and Vilas Solanki, the Head of Ops, taking home salaries of Rs. 1.20 crore and Rs. 30 lakh respectively.
In contrast, Prashant Jain, the whiz-kid fund manager with HDFC Mutual Fund, pockets a fortune of Rs. 22.62 crore. However, even he is second place because Milind Barve, the MD of the Fund, rules the roost with a pay package of Rs. 26.21 crore.
The other fund managers of HDFC MF pocket salaries ranging from Rs. 13 crore to Rs. 5 crore. As many as 38 persons receive remuneration in excess of Rs. 1 crore.
Prima facie, the remuneration levels appear to depend on the AUM of the Mutual Fund and the celebrity status of the fund manager. The performance of the fund may also have a bearing.
Some Mutual Funds are following a sneaky practice to ward off nosey parkers.
Reliance Mutual Fund promises to send an OTP to a mobile number. However, the OTP never arrives and the nosey parker is left clueless. Ultimately, he gets frustrated and abandons the attempt.
DSP Blackrock Mutual Fund has such a complex verification process that even the most determined nosey parker will feel discouraged. It also has a stern legal warning that “no part of this data should be reproduced, shared, published, distributed, displayed, performed, copied or stored for public or private use in any information retrieval system, or transmitted in any form by any mechanical, photographic or electronic process, including electronically or digitally on the Internet or World Wide Web, or over any network, or local area network.”
@SIP_Seller @NagpalManoj Phew! Enter several details, then a link to email id and then select one employee and they say that HR will respond
— Mahesh (@invest_mutual) May 1, 2016
DSP Blackrock’s complicated process and warning did not go down well with some experts who are irked that regulatory information is being sought to be kept a secret.
@NagpalManoj @AmolPlanRupee @sumit0409 @drnarendranET what nonsense? It's like saying that RTI cant be shared.
Legal is exceeding brief????
— kitsharma (@kitsharma) May 1, 2016
@nooreshtech But pathetic that a statutory disclosure cant be disclosed to / shared with public! Cant even find the link of some top AMCs
— Mahesh (@invest_mutual) May 1, 2016
Ajit Dayal, the head of Quantum Mutual Fund, has publicly welcomed SEBI’s move on the basis that the disclosure would give retail investors more confidence in the industry.
“Disclosure of salaries is a good thing. We believe the investor has the right to know the extent and the nature of expenses that the fund incurs for managing the investor’s money.” He added that “Quantum has no issues in disclosing what we pay our employees and we welcome this move that encourages greater transparency in the system.”
However, when I last checked Quantum’s website, the information was not yet uploaded. Quantum’s website reveals that the salaries of the fund managers ranges from Rs. 35.85 lakhs to Rs. 77.12 lakhs.
The information appears to be absent from the websites of the Birla Mutual Fund, SBI Mutual Fund, Mirae Mutual Fund and Sundaram Mutual Fund.
It will be interesting to see whether the remuneration commanded by other whiz-kid fund managers like Sunil Singhania and R. Srinivasan is comparable to that paid to Prashant Jain and the extent of variance. We must also know who the top dog of the Sector is. Any bets?
Prashant Jain’s salary is higher, in fact nearly 3 times than the salary of Aditya Puri, the CEO of HDFC Bank, unless I am missing something. That is really interesting.
Parshant Jain salary is in contrast to his fund performances in last 5 years including last year.If fund performances of HDFC top 200 and HDFC equity don’t improve now onwards, we may see Exodus of investers from his funds.Long term investers are no more content with his Star Status but are concerned with his inputs .Time is running out and his continous underperformance may not be tolerated further under past glory.
Well, the promoters of fund house (the ones deciding and giving the salary) would not judge a fund managers’ salary by returns. They would decide the salary by the funds the manager can mobilize because the profits of the fund house would depend on that. Its up to the investors to decide whether they would want to continue in the fund. Also to answer your other point each fund has a set investment strategy. And accordingly they are classified into large cap, mid cap etc. You cannot blame a fund manager for following the strategy the fund has decided upon.
CEOs would have a truck load of stock i’d imagine
Aditya Puri also get stock options so when you consider that his salary would be much higher. I would be more interested in knowing what prasanth jains hike for the current year is considering the underporformance of hdfc 200 and equity. I do not think this dis-closer will make a big impact for retail investors it is so difficult to find the link and ordinary investors do not look at it but some of the fund manager will there may be churning of managers. Also another interesting point is the lowest to highest paid ration some of the smaller ones pay their new employees more.
Lots of money folks……….After all cant you eat a pie of your own cooking?
First of all, all you idiots who invest in mutual funds just listen ok. No listen. Bhai, these funds take stakes in companies which compromises standard bse and nse markers. Nothing is special. Nothing. They are utter jokers and con artists. You must invest in equities and don’t wait for a faltu fund manager EXPERT to decide where to invest. When the bse does well, miraculously the fund performs. When it goes down, then oh it is so easy to blame bse or nse index. Now keep quiet and don’t dare tell me MF are of any special status. They are jokes.
Although you must be feeling great and stock expert in calling large no of mutual fund investers as Ideats and claiming that they invest only in Sensex or NIFTY stocks.But I would like to mention here that there are different Catagry of mutual funds ,even those which invest in micro cap,small cap , mid cap and muticap .More over if we ignore 20 % smart and knowldge investers ,who had made money by directly investing in equity,mutual fund investers might have done better than those 80,who burnt their fingures on tips or half cooked stories.So for those who are not experts or don’t have time and has not been able to make money by investing directly ,mutual fund is better option.But you can ignore this opinion as from one of the fools of your mentioned Catagry.
Well friend, it is clear that the income of MF management is secure, regardless of the poor investors, whose income is not.
I have a windfall receipt and was thinking of investing in MF’s. Now since according to you these fund managers are a bunch of jokers, could you suggest a portfolio given your investing expertise. midcap to largecap in a proportion of say 80:20.
Perhaps we should write to Mr. Parag Basu email@example.com who has signed the SEBI circular SEBI/HO/IMD/DF2/CIR/P/2016/42 on this
Very disgusting, even an administrative kind of job like company secretary is getting 3 crore. Just because people are investing in HDFC fund, that doesn’t mean that they can distribute public money like that. Worse are funds like Icici pru and DSp blackrock who are resorting to cheap tactics to make fun of the intention with which such disclosure were mandated by SEbI. Shame on MF industry…
Looks like Sebi is acting like a toothless tiger. Why Sebi is unable to control excessive salaries when funds do not perform. I have analyzed most of the large cap funds which hold 70% of top shares in safe companies known to all of us. Fund managers experiment with 25 to 30% funds to invest in other companies. So fund manager also depend on exchange trends in which case why poor investors have to suffer. Most fund managers play safe to keep their kitty stable. Sebi has to act. I invest directly in market now instead of routing through Mutual funds. I am prepared to take responsibility for my decisions.
It is quite alarming that the high salaries are actually eating into the returns the mutual fund investor is entitled to. These managers are so well paid that they seem to be working more like brokers on a monthly fixed income!
These guys (HDFC MF) are taking people for a ride despite such atrociously low returns. We can safely say that this one single disclosure about FM salries is likely to change investor view on the fund.
Wow the worst performing hdfc funds have such high salaries. Open loot by mutual funds
Some Ex-Ox wagon “drivers” now turned as Fund managers. I know a CEO from south who was a dealer in a share broker’s office and now all TV channels are after him to get his foolish predictions and opinions.
BTW his funds are performing good by grace of insiders
who is he ? please give some hints ?
Kotak MF says password will be given after 2 days of verification! Birla – one cannot find the link, ditto for Templeton…and these are the guys we give our money to… their level of disclosures is pathetic
i Have been investing in MF from past 8 years and an year back in started investing in direct equity. while i read the salary of HDFC FM i decide to off load gradually from MF and start direct SIP in bluechip and some micro cap companies.. i will become my own fund manager in next 6 months fully.