Who is Sandeep Tandon, what is front running? All about Quant Mutual Fund

Sebi is reportedly investigating charges of front running at Sandeep Tandon-owned Quant Mutual Fund.

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Quant Mutual Fund is in the news amid reports of alleged irregularities in investment-related activities by its fund managers. In other words, the market regulator, the Securities Board of India (Sebi) suspects a case of front running by select money managers at Quant Mutual Fund.  

According to sources, Sebi conducted raids at Sandeep Tandon-owned Quant Mutual Fund at its offices at Mumbai and Hyderabad on Friday.

The market regulator’s action follows discrepancies noted during regular inspections, the sources said. Audit firms had also flagged concerns after their inspections, which they had submitted to Sebi. READ MORE

Who is Sandeep Tandon?

Sandeep Tandon is the founder of Quant group, with over 25 years experience in the financial services industry. At present, Sandeep oversees investment decisions in 22 schemes at Quant Mutual Fund.

In the past, Sandeep Tandon was part of the core team at IDBI Asset Management, now known as Principal Asset Management; vice-president at ICICI Securities and part of The Economics Times Research Bureau.

What is front running?

Front-running refers to an unethical and illegal practice of making profit from the share market. 

In general front-running or forward trading is a practice wherein a share broker/ dealer or fund manager acts in advance owing to knowledge of placement of a large order at the particular counter. 

According to Sebi in case of front running – Share brokers have access to information related to the orders of investors in advance. In case, they use this information to trade and obtain profits in their personal trading account.

In simple words, a fund manager is privy to confidential information of the fund's trading activity in particular stock that can have a significant impact on the share price on the given day. The fund manager passes the said information or places a similar trade prior to the deal in a proxy trading account to take benefit of the possible sharp price movement.

About Quant Group

Quant Group was incorporated in December 2007, and started operations in 2008 - in the midst of the Global Financial Crisis with two simple guiding mantras - 'Being Relevant' and 'Predictive Analytics.'

As per information available on the group’s website - the guiding philosophy of 'Being Relevant' means that in a dynamic and volatile world, to remain relevant, and to preserve and grow wealth, the test of time must be passed every day by continuously updating knowledge and innovating on systems and processes.

This is enabled by 'Predictive Analytics': an all-encompassing framework for understanding and forecasting markets, across assets and geographies, the website stated.

The Quant group received its mutual fund licence in 2017. From around Rs 100 crore in the year 2019, the fund has seen its assets under management (AUM) swell to over Rs 80,000 crore at present.