Skin in the game matters: Samir Arora suggests investors to question fund managers on personal exposure

Underscoring the importance of transparency and fairplay on the part of fund managers and brokers, Samir Arora, founder and fund manager at Helios Capital Management, has advised investors to ask the right questions before making a money move.

Arora urged investors to ask asset management companies (AMCs) or their fund managers when did they last invest in their fund/strategy and what percentage of their net worth is invested in the schemes they are recommending.

“You should ask an AMC or its fund managers when did they last invest in their fund/strategy, how much % of their net worth is invested in whatever they/he is recommending etc.,” Arora said in a tweet.

The same applies to the fund managers as well. “Similarly you can ask a wealth manager who recommends (say) a new fund/strategy etc.- what is his personal exposure,” the tweet said further.

For traders, the same principle applies, he added. “You can also ask a broker- how much of his personal wealth he is hedging via weekly options and futures etc,” the Helios founder.

In the investment parlance, this is called ‘skin in the game’. Market regulator Securities and Exchange Board of India (Sebi) has rules governing this aspect.

In March, the regulator relaxed the ‘skin in the game’ requirements for mutual funds, allowing employees of the Asset Management Companies (AMCs) a slab-wise contribution into the schemes in which they have a role. The revised rules became effective from April 1, 2025.

The previous mandate required designated employees to get 20% of their remuneration in the units of their mutual funds, to ensure that their interests are aligned with the unitholders.

Read more: Sebi relaxes ‘skin in the game’ rules for mutual fund managers, allows slab-wise contribution

Arora is quite active on Twitter and puts across his opinion on stock markets and investment related subjects.

Recently, he commented on the issue of H1-B visa, giving his take on what IT companies should do instead of brushing it under the carpet. While he sees no material impact of US President Donald Trump’s H1-B visa executive order on Indian IT companies, estimating the hit could be 5% or less. However, he advised domestic tech firms to clearly communicate how they are responding to the perceived threat, instead of brushing it off by saying the development does not matter.

Read more: H1-B visa hit may not be more than 5% but Indian IT firms must address US policy impact openly: Samir Arora

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