One notion about Life Insurance Corporation of India persisting in the public mind is that of a government hotline. It is widely believed that every time the stock market sees a historic crash, the phone rings at the investment department with instructions to support the market. Indeed, in various Black Mondays witnessed by the equity markets, when the Sensex crashed several hundred points, LIC was the only buyer. What irks Sushoban Sarker, CEO of LIC MF Asset Management, is that LIC is not being given enough credit for diligently following the age-old strategy of buying cheap and selling dear. “If you get an opportunity to buy an asset for Rs 750 which was until now selling for over Rs 1,000 what would you do?” asks Mr Sarker in an attempt to explain LIC’s strategy. He points out that legendary investors like Benjamin Graham and Warren Buffett have made their mark by buying value stocks during economic downtrends. While in a market crash attention immediately shifts to LIC, what has gone almost unnoticed is that the corporation made a killing selling bluechips when the Sensex crossed 20,000. Besides this simple home truth, LIC’s other investment philosophy has been to ensure that there are always some self-defined ground rules, even when there is freedom from regulation. Completely unrestricted fund management is the hallmark of hedge funds which have been in the news for losing investors’ money.
Mr Sarker brings these values into his new job at LIC Mutual Fund where he took charge in April. Mr Sarker, a direct recruit at LIC of the 1977 batch, has close to a decade’s experience in investment. Immediately before taking charge, he was executive director in charge of investment department at LIC. He has overseen LIC’s investment in diverse financial instruments including equities, government securities and corporate bonds. After graduating with honours in physics, Mr Sarker went on to acquire a post-graduate degree in financial management from Jamnalal Bajaj Institute of Management Studies, University of Mumbai. He has been on various committees, including those constituted by the government, RBI and the Insurance Regulatory and Development Authority. Though the Rs 18,000 crore-odd assets under management of LIC MF are significant, compared to LIC’s assets of close to Rs 8,00,000 crore they may appear small. But there is a lot of excitement in the fund business. On the cards is a proposed joint venture with Japan’s Nomura. The fund ranks No.11. Mr Sarker aims to improve the rankings and bring LIC MF to the 5th or 6th position. The mutual fund has so far done well in liquid and debt schemes. He wants to diversify a bit more into equity. Although in recent months life insurers and mutual funds have been fighting a bitter turf war, Mr Sarker, who has made the transition from insurance to asset management, feels there is no inherent conflict. On the contrary, he feels there is scope for LIC MF to work closer with its parent and use the distribution network to offer fund products to high net worth customers.
Source: Economic Times
