Quant hires mutual fund industry outsider as next CEO

The new chief executive, who is set to join in April 2025, is a mutual fund industry outsider – from a global financial conglomerate – according to a source. “We have closed the appointment of a chief executive officer, who is someone with strong regional and global experience. We expect the CEO to join us by April 2025,” Quant said in its latest factsheet. It did not disclose more details to comply with regulations.

Hiring spree

The asset management company (AMC) has hired six people for top management roles in the past nine months, including chief financial officer & director, chief operations officer, head of investor services, and head of operations. Most of them were hired from other AMCs.

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Quant’s new CFO & director Shashi Kataria and head of operations Premprakash Dubey will be joining from Parag Parikh AMC. Usha Lakshmi Raman, who was previously with SBI AMC, will come on board as chief compliance officer and head of internal controls. Sudha Biju, who will head investor services, and  Yogesh Kuwadare, who has been appointed as a professional consultant to conduct a process review, are joining from HDFC AMC. Sameer Kate, who previously covered equity and derivative and trading for Indian mutual funds and foreign firms at Investec Capital will join as a money manager, according to Quant’s December factsheet.

Quant has grown rapidly in the past few years, making it difficult for Tandon to juggle the operations and investment divisions, said another person in the know. CIOs and fund managers at mutual fund companies are required to record their conversations during market hours, which can hamper their ability to conduct meetings during market hours. The hiring also signals that Quant is looking to shed its image as a one-man show.

Also read: Sebi targets asset management companies in market abuse crackdown

The mutual fund company has Rs.97,000 crore in assets under management, with 84 lakh folios across 27 schemes as of November, according to its monthly fact sheet. In December 2020, just before the covid pandemic, it had just ₹488 crore in AUM and 58,000 folios. Unlike most mutual funds, which employ a buy-and-hold strategy, Quant relies on its proprietary valuation, liquidity, risk, and timing (VLRT) strategy that requires a lot of churn.

Front-running allegations

On 21 June, Sebi conducted a search and seizure at Quant’s offices in Mumbai and Hyderabad after its surveillance indicated possible front-running by entities with insider knowledge of Quant’s trades. The regulator suspected that Quant executives with information about the size and timing of orders may have leaked this to beneficiaries. 

The AMC said it would cooperate with Sebi’s investigation. “We want to assure you that Quant Mutual Fund is a regulated entity, and we are always fully committed to cooperating with the regulator throughout any review. We will provide all necessary support and continue to furnish data to Sebi on a regular and as-needed basis, demonstrating our unwavering commitment to transparency and integrity.”

Also read | Mint Explainer: Front-running cases and Sebi’s fight against market manipulation

Front-running occurs when market makers deal on advance information provided by their brokers and investment analysts, before their clients have been given the information.