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FUND MANAGER 2006

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The Logical Thinker

RAM PRASAD SAHU

You have to stand guard against biases and keep refining your thought process to succeed in the markets, says Fidelity’s Sandeep Kothari

It’s easy to lose one’s head when the bulls are on a stampede. The smart ones move away from their screens and step back to think about the big picture. Sandeep Kothari, fund manager at Fidelity does just that. His Fidelity Equity Fund has returned 44 per cent beating the industry average of 37 per cent for 2006-07. That has earned him the Business Standard Equity Fund Manager of the Year award. But how does this 37-year old chartered accountant hold his horses when the road ahead twists and turns abruptly?

STICK WITH YOUR PICKS

Rather than get distracted by the prices, Kothari tries to think through his investment logic. That helps him weed out scrips that do not stand analytic rigour and add those that are mispriced. Says he, “If the price of a stock you hold is falling, you should have the conviction to buy more. Or else get out of it.” This decision is based on new information available on a daily basis, something that forces him to rethink what could go wrong. “Every day you learn something new about the industry, business and the management and that increases or brings down your conviction,” Kothari reasons.

THE WEALTH EFFECT Kothari, who was born and completed his schooling in Indore, has always been fascinated by the markets and the money it can make for investors. “I have never doubted that it is a great career. You meet the best people, you learn everyday and you get paid for it,” he says laughing. When he has some spare time Kothari loves to read tomes on management, investments and economic history. His favourite book? Peter Drucker’s Managing in Turbulent Times. When he is not trying to figure out the future of a business, Kothari hits the jogging track. Running is not just a weekend hobby– he participated in the half marathon last year and believes that it helps reduce stress. And of course, it helps him stay fit. While he has chalked out a successful career in equities, what keeps him going? “In the markets, everyday is a test,” he says. He loves the interaction with entrepreneurs and the ideas they pilot and believes that companies go beyond wealth creation—they build enduring institutions. THE BOTTOM-UP APPROACH Kothari’s stock picking strategy follows that of Fidelity’s. Rather than focus on macro factors, the fund house follows a largely bottom-up strategy.

SANDEEP KOTHARI Fund Manager, Fidelity Fund Management Assets under management: Rs 4,100 crore Schemes under management: Fidelity Equity, TaxAdvantage Best risk adjusted equity fund: Fidelity Equity (AUM - Rs 3,200 crore) 1 year returns: 44 per cent

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Business Standard • FUND MANAGER • October 2007