Skin in the Game

SEBI has mandated key people of fund houses to invest in their own funds. What impact will this have on the returns of the funds and the underlying stocks?

- Prem Vora

Editor Responds
The regulator through this circular wants to have the fund managers’ skin in the game. There were cases earlier when some of the key personnel of an AMC took advantage of insider information and exited the fund before common investors. The returns of the fund will not have much of an impact due to this mandate. Nonetheless, underlying stocks may gain if there is low float and higher investment by DIIs.