{"id":3433,"date":"2019-08-24T03:49:18","date_gmt":"2019-08-24T03:49:18","guid":{"rendered":"https:\/\/kuvera.in\/blog\/?p=3433"},"modified":"2019-08-24T03:51:14","modified_gmt":"2019-08-24T03:51:14","slug":"mr-manish-banthia-senior-fm-at-icici-prudential-on-the-credit-fund-conundrum","status":"publish","type":"post","link":"https:\/\/kuvera.in\/blog\/mr-manish-banthia-senior-fm-at-icici-prudential-on-the-credit-fund-conundrum\/","title":{"rendered":"Mr Manish Banthia, Senior FM at ICICI Prudential on the credit fund conundrum"},"content":{"rendered":"

Mr Manish Banthia is a Senior Fund Manager and has been associated with ICICI Prudential AMC<\/a> in several roles including fixed income trading, credit analysis and product development. He has rich 12-year experience and started in the Indian credit market space in 2007.\u00a0 Mr Banthia categorizes his investment style as value investing and his investment philosophy is safety, liquidity and returns – the key tenants of debt investing. He manages the ICICI Prudential Credit Risk Growth Direct Plan<\/a>.<\/p>\n

We spoke to him on email on the current credit conundrum.<\/p>\n

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Gaurav Rastogi (GR):\u00a0 <\/strong>How long you have been investing in Indian credit? What drives you to find the best credit opportunities?<\/p>\n

Manish Banthia (MB): <\/strong>I have been associated with the Indian credit market space since 2007 when I started out as a credit risk analyst.<\/p>\n

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In terms of finding credit opportunities, we believe a qualitative approach along with the quantitative assessment of the issuer is what works the most. One has to understand the issuer\u2019s business profile; business environment the company is operating in, strategic placement of the company offerings in its sector, leverage the company has taken and repaying ability of the credit issuer. A combination of all these factors are inputs used in the decision-making process. So, essentially it is more of a bottom-up approach to research when it comes to determining credit opportunities.<\/p>\n

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GR: <\/strong>As someone who has seen multiple credit cycles, do you think there is anything different in this credit cycle? Is \u201cthis time really different\u201d?<\/p>\n

MB:<\/strong> Credit cycles are normally fat-tailed events which do not occur very frequently. Therefore it is difficult to gauge when the cycle would turn. However, the intensity of each cycle could be different. From 2012 to 2016, we saw a corporate credit cycle and currently, we are seeing a financial lenders credit cycle. It is very likely that we have come a long way through the current credit cycle as historically it is seen that when the pessimism is very high in a credit cycle, as is the case now, that\u2019s when the cycle typically tends to turn.<\/p>\n

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Credit cycles are normally fat-tailed events which do not occur very frequently.<\/strong><\/em><\/p>\n

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GR: <\/strong>What, in your opinion, precipitated this loss in trust in credit in the recent cycle? It would also be good to know how the MF investor came to start believing that a credit fund is the same as traditional investment avenue? A de-risking had happened in the minds of MF investors on credit funds and now that there have been actual losses some of them have not been able to come to terms with it. It will be good to know your opinion and thoughts on this?<\/p>\n

MB: <\/strong>If we look at some of the recent credit events, they had the following broad characteristics:<\/p>\n

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