Can a new captain return HDFC AMC to old glory?

HDFC AMC has appointed a successor to its current MD Milind Barve in SBI Mutual Fund’s CIO Navneet Munot, who is credited to make SBI MF India’s largest fund house in terms of assets under management (AUM). While HDFC AMC, with 2nd highest AUM, remains the most profitable AMC in the country, of late, its heavy PSU exposure has led to under-performance in key equity schemes.

While Navneet Munot has been an ace investment professional, how well will he wear a Manager’s hat to run a Rs. 50,000 crore market cap company? Will there be a strategic change in HDFC AMC’s investment style – more passive in line with rising preference for ETFs, or continue with the active focus under its storied CIO Prashant Jain? Will the company chase volumes (AUM) growth over margins (profitability)?

It remains to be seen whether HDFC AMC can reclaim pole position of being the largest and the most profitable fund house in the country, both together, under a new captain.