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Fund
Manager of the Year : Equity whizkid
R Sukumar, senior vice president & chief investment officer
(equity) at Franklin Templeton manages Rs 2,200 crore equity assets
spread over 21 schemes. Three of his schemes rank among the top five
in the equity funds category
The
Smart Investor Team
R Sukumar keeps
an unusually low profile for a fund manager who has the distinction
of beating the market over all market moods. That's understandable:
for one, he is located in Chennai, far away from financial capital
of the country. But staying away from the activity zone does have
its advantages. "Being slightly detached from the market is actually
good because you are not carried away by sentiments," says Sukumar.
This engineer from Roorkie University in UP, and a post graduate diploma
in management holder from the Indian Institute of Management, Bangalore,
Sukumar (39), entered the fund management industry in 1994 when he
joined ITI Pioneer. ITI Pioneer was taken over by Franklin Templeton
last year.
This year, three out of the top five performing equity funds on a
risk-adjusted basis were from the Franklin Templeton house. Two of
these were Franklin Templeton's Asset Allocation Funds - the inflation
hedge fund and the conservative growth fund - and the Prima Fund.
What makes Sukumar tick? The answer lies in a quote by Thomas Carlyle
"Conviction is worthless unless it is converted into conduct."
That's one thing Sukumar genuinely believes in, whether it be his
personal or professional life. "When it comes to investing, a
level head and the ability to step back from the market to be able
to take rational decisions is the key to successful investing,"
says Sukumar.
Sukumar believes in the traditional school of value investing. One
Up On Wall Street by Peter Lynch and The Warren Buffett Way by Robert
G Hagstrom are the best investment books he has ever read.
Learning how to pick stocks is one thing, and actually picking them
up is another. Indeed, it's not the approach, but the execution that
is critical. After all, companies do not come with a tag saying whether
or not they meet the many parameters laid out by the stock picker.
To be able to distinguish between companies based on these characteristics,
one requires an in-depth understanding of businesses, something Sukumar
and his team have really mastered over the years.
His most profitable pick this year has been Indo Gulf Fertilisers.
Sukumar first bought the stock before the company announced plans
to demerge its copper business, essentially because the stock looked
undervalued. And after the demerger was announced, Sukumar decided
to add to his holdings because there was a clear cut arbitrage opportunity.
But Sukumar's affair with Indo Gulf didn't quite end there. He bought
more shares when the de-merged company was listed as the stock and
trading at around Rs 20 while the company was sitting on cash of Rs
50 (per share). And when the company announced an open-offer at Rs
75 per share, Sukumar made a killing.
Sukumar's worst deal during the year was picking up Digital GlobalSoft.
"We had misjudged the merger implications which turned out to
be very unfavourable to minority shareholders" says Sukumar.
Thanks to the splendid performance of his funds, Sukumar is among
the best paid domestic fund managers. And as he gets richer, he is
taking to rich boys games too. He has now graduated from playing billiards
and snooker to Golf!
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