India's Best Fund Managers 2017

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Richard D’Souza keeps an eye on companies at the cusp of change

Soumik Kar

Not many fund managers you meet use Sherlock Holmes as an analogy to explain their approach. However, Richard of AMC cites Arthur Conan Doyle’s creation and his detective work in the story, “The dog that didn’t bark” to make his point. He says that the job of a fund manager requires a similar deductive thought process to unearth the far-reaching impact of news flow or to cut through market noise or to identify a change in trend.

The nature of the thematic funds that D’Souza handles — SBI Magnum Comma Fund (Commodities), SBI PSU Fund and SBI Infrastructure Fund — is such that decibel levels are always high and many times confusing. However, D’Souza’s funds have done well over the past 3 years. The commodities fund has given a return of 25.15%; the infrastructure fund and PSU fund have posted a return of 25.49% and 19.59%, respectively. D’Souza’s funds are closely linked to the capex cycle and the investment climate is yet to recover from the sluggish patch it hit in the aftermath of the global financial crisis in 2008.

Growing up in a middle-class home in Dombivli, D’Souza says much of his learning has come from his habit of reading. He would borrow books from a friend and that helped him inculcate the habit. When he was in college, D’Souza’s reading led him to business magazines and that piqued his interest in equity research.

He started his journey in equity research on the sell-side with Vajani Securities in 1992. The research division there was headed by Lalji Lakhamshi Chheda who taught him the important lesson that the numbers are already in the price. Chheda instilled in D’Souza that the only way to make a good return is to figure out what could happen to the company.

Equity research was still at a very nascent stage in 1992. As D’Souza recalls, it was a bit like the Wild West. There was no SEBI and companies’ financials were not easily accessible. “We would go down to the STD booth to call up companies that were out of Mumbai — they wouldn’t publish their financials in papers — to get their half-yearly results. We manually built the database. At that point of time, companies didn’t report quarterly results,” he says.

While he learnt the importance o

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