Quant Mutual Fund Outflows at Rs 1,398 Crore or 1.5 per cent Amid SEBI Probe; Complete Details Inside!

Quant Mutual Fund disclosed in an investor call on June 26 that it faced net equity outflows of Rs 1,398 crore amid SEBI's investigation into potential front-running.

Quant Mutual Fund has experienced net equity outflows amounting to Rs 1,398 crore following SEBI's investigation into potential front-running, the fund house disclosed in an investor call on June 26. Earlier this week, SEBI had conducted a search and seizure operation at Quant Mutual Fund due to suspected front-running activities. This development has raised concerns regarding the fund’s holdings in midcap and Small-Cap stocks, as well as its liquidity position, especially in the event of larger-than-usual redemption requests.

During today's call, Sandeep Tandon, founder and CIO of Quant Mutual Fund, aimed to calm investor apprehensions by emphasizing the fund's liquidity. He highlighted that the fund has strategically shifted from Mid-Cap to Large-Cap investments and from illiquid to liquid strategies in recent months. He reassured investors by noting that there have been no significant redemptions of concern in the past three days. In his presentation, he pointed out that while gross inflows continue to be steady, there has been an uptick in gross outflows.

Quant's recent liquidity stress test revealed that the fund house would require 28 days to liquidate 50 per cent of its small-cap fund portfolio, and 14 days for 25 per cent of the same. For the Quant mid-cap fund, the liquidation period is estimated at 9 days to sell off 50 per cent, and 5 days for 25 per cent of the portfolio. Notably, the Small Cap Fund holds 28 per cent of its portfolio in liquid large-cap stocks, while the Mid-Cap Fund allocates 27.4 per cent similarly.

Quant manages approximately Rs 90,000 crore in assets under management (AUM) spread across 21 mutual fund schemes. It oversees the third largest small-cap fund in India, with assets totalling Rs 20,000 crore.

Disclaimer: The article is for informational purposes only and not investment advice.