Quant Mutual Fund has been one of the fastest-growing mutual funds in the country. The fund house has had a phenomenal run, with its assets multiplying nearly tenfold, from ₹100 crore in 2019 to nearly ₹90,000 crore now.
The Sandeep Tandon-owned mutual fund, which came into existence after Quant Capital acquired Escorts Mutual Fund, is now facing seizure and search operations directed by the market regulator, the Securities and Exchange Board of India (Sebi) for alleged front-running.
Front-running is an illegal practice where fund managers or dealers or brokers who are aware of upcoming large trades place their own orders beforehand to profit from an anticipated price movement when the large trade is executed.
Sebi issued Quant Mutual Fund's licence in 2017. The fund house, which is the country's 20th largest, currently has ₹90,000 crore worth of assets under management. Reliance Industries Ltd (8.75% of AUM), Adani Power Ltd (4.66%), and JIO Financial Services Ltd (4.52%) are among Quant's top holdings, Business Today reported.
Sandeep Tandon never drew a salary from the fund when it was making losses. In 2018, Tandon acquired Escorts Mutual Fund, getting full ownership of the mutual fund.
Tandon has revealed how he ventured into investing.
“I was in college during stock broker Harshad Mehta’s heydays and witnessed the euphoria in the markets then. I somehow managed to convince my father and uncle to sell all their stock investments. The markets went up another 20% but then it crashed significantly. After that episode, my father and uncle handed me their investments and told me to invest that money. That’s how I really got into the markets. You can say, that’s how I got my first seed capital,” he said.
According to the chief executive officer of Quant Mutual Fund, the fund house relies heavily on a data-driven investment approach. This strategy has gained the company a solid track record in six years.
“Everyone wants to be the next Warren Buffett of India," Tandon had told Mint in an interview for the Guru Portfolio series. “I don’t have any investment, and I don’t try to mimic anyone’s strategy."
Long-term investments and value for money have been the driving factors behind Quant’s start, the Quant CEO had told Mint.
Tandon’s investment policies involved a penchant for diving into uncharted territories and always being on the lookout for opportunities, CNBC TV reported. Irrespective of market conditions, the Quant CEO looked for a positive performance rather than aiming for a specific internal rate of return (IRR) within a stipulated time-frame.
As Quant comes under Sebi's scanner for alleged front-running, the MF's founder is probably in yet another uncharted territory.
