The closure of the six Franklin Templeton (FT) schemes last year is, at its core, a failure of risk management, as amply illustrated in the Securities and Exchange Board of India’s (SEBI) recent order. But were these deficiencies specific to one firm, or can we take broader lessons for the Indian fund industry?
Assets under management with credit funds grew in India as long as their inflows exceeded outflows. It was only when the trend reversed that those funds had to face up to the task of selling in an illiquid market.
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