CIO
CITY OFFICE REIT, INC.
stock NYSE

Well I'm the CIO of a sovereign wealth fund with 30 years experience

Well I'm the CIO of a sovereign wealth fund with 30 years experience

Tokenomics is quickly becoming part of enterprise Al planning as organizations weigh Al agent costs across efficiency, performance, and budget. Hear more from AMD SVP & CIO Hasmukh Ranjan.

Sure, if 25% start moving out, PPFAS has to sell. They’ll use the debt up first and the arbitrage but beyond that, stocks need to be sold.
Here’s the differentiator: PPFAS holds a lot of largecaps. This space has maximum liquidity, which can absorb the selling pressure easily. Their HDFC bank holding alone is worth close to ₹12,500 Cr. It’s shouldn’t be an issue in a ₹11 lakh crore bank, although it might drop the price a little, but won’t even be close to its LC. Plus there’s usually ₹2k-5k fresh inflows every month in the scheme.
You’re fixated on major redemptions and exit load. The original comment meant for people to exit, but wasn’t at exaggerated values of 25%.
Margin calls are leveraged, so the issue is magnified 3-5x (or even more, based on leverage taken) Here, it’s the cash market.
For FT, you’re talking the effect. The reason they stopped redemptions, was because their underlying holdings were illiquid. They had taken on more risk earlier (in a risk on period) and a lot of these bonds were longer tenures.
They had to freeze redemptions and ask for longer timelines to get the money. Plus SEBI took over because their schemes weren’t liquid enough.
To do an apples to apples comparison, you would be looking at a flexicap scheme which is heavily invested in mid and small caps, with 0-2% cash.
There’s a lot of schemes that hold very little cash, so you should actually be worrying about those first.
Even after the crisis, FT schemes did well. But they didn’t serve their original purpose, which was to provide liquidity in the short term. Imagine an equity fund, which delivers debt like returns in the long term. It pretty much kills its purpose. Plus they didn’t inform their investors about the amount of risk they were taking in their schemes. This kills trust, which means a lot of investors would think twice before investing with them again.
They actually ended up poaching the CIO of ICICI Pru fixed income for their debt team.
Buy you’ll still see them struggling (compared to the size of the AMC they are now)