Tata Mutual Fund creates a side pocket for its DHFL exposure

[RahulKhanna]

Here we go. Tata Mutual Fund becomes the first AMC to create s segregated portfolio (side pocket) for it’s exposure to DHFL securities after the default.

https://www.tatamutualfund.com/docs/default-source/other-documents/press_release_tcbf_tmtf_ttmf.pdf?sfvrsn=e1621974_2

If you arent sure what a side pocket is or how it works, check this post:

SEBI allows side-pocketing in mutual funds

Interesting development. SEBI now allows side-pocketing in mutual funds. To give you a gist, let’s take the example of IL&FS. Many mutual funds which were holding IL&FS paper marked down the value and some cases wrote off the value of the paper. The new system allows the AMC to sperate this paper from the main fund and split the NAV, hence the term “side-pocket”. The risky portfolio that will be separated consisting of the illiquid/default securities will have a separate NAV but won’t be open fo…