The comparison with corporates like Page and HDFC Bank are not relevant. Fund management business is a different ball game compared to any other business, the reliance on fund managers is huge. In other businesses you have teams that execute, in the AMC business the fund manager’s decision making is what keeps the motor running and determines the bulk of the fund performance. You can fire a couple of well known CEO’s today in execution heavy businesses and not much will change, not so in the case of an AMC.
Fund management business is all about the fund manager unless the AMC has actively steered clear of that approach by “corporatizing” the fund management process and mindset. This is clearly not the case with HDFC AMC on their equity AUM for the large cap and diversified categories where their reliance on Prashant Jain is huge even today. You will see countless examples of AUM’s taking a hit as soon as a star fund manager decides to move on - this is across the world.
The impact due to the fund manager leaving is much higher in HDFC AMC and not so high for other AMC’s - that is my central point. I have pitched MF to 100’s of customers, most customers who invest/stick with HDFC equity funds do so for Prashant Jain and his track record. Of course not every customer is going to redeem if he leaves but there will be a material impact for some quarters for sure in my assessment, this coming from ground up. The man’s cult status in Mumbai circles is unbelievable, Mumbai has 44% of the country’s MF AUM.
This risk cannot be quantified but one needs to think more about risk than reward when a story looks well valued. If the stock were trading at say 900 Rs, I would think more about the positives that can materialize 