Would you trust your fund manager with your hard-earned money? How do you choose one?

Is it past returns? Fancy strategy decks? A team with MBAs, quantitative scientists, sleek corner office with the swankiest address?

Truth is, most of that doesn’t really tell you whether they’ll care about your money the way you do.

Choosing a fund manager is one of the most important financial decisions you’ll make. Because you’re not just outsourcing investments. You’re trusting someone with your long-term dreams, your retirement, your child’s future, your family’s peace of mind.

So how do you decide who’s actually worth that trust?

This is a thought that struck us while reading this Seth Klarman 1991 classic Do They Eat at Home?- and gave inspiration and birth to this short blog. Here, we break down what you should really be looking for when choosing a fund manager. And why their personal actions might say a lot more than their polished pitches.

We believe there are a few things that really matter.

Do they invest in the same funds they recommend?

Let’s start with the basics. If your fund manager is telling you to stay invested for the long term in Indian equities, but they’ve personally parked their wealth in US treasury bonds or a bunch of bank FDs, you’ve got to pause. That disconnect says a lot.

It’s okay to ask. You absolutely should. “Are you invested in this fund yourself?” is a fair and important question. You’re not being rude. You’re being smart.

Do they have real skin in the game?

It’s one thing to say, “I believe in this fund.”
It’s another to back that belief with actual money.

You want to see some alignment. You want to know that when markets fall, they feel the same pinch as you do. Because when they’ve got something to lose, they’ll be more careful with how they manage your investments.

SEBI mandates that fund managers invest a portion of their compensation in the very funds they manage. That’s a good start. But here’s the real question, are they doing it only because the regulator asked them to, or would they have done it anyway?

You should be a wary of a fund manager who says I am all-in on small-cap stocks when pitching, but in his own portfolio? Mostly large caps says a lot, doesn’t it?

Are they good, or just lucky?

Sure, a 30% return looks great on paper. But did it come from skill or was it a fluke? Did they ride one hot IPO or time a market rally? That’s not strategy. That’s luck.

Look at the full picture. How did they do during tough years? What happened in 2020? How did they handle 2008, or even the volatility during demonetisation? A good manager protects capital during the bad times. She thinks structurally, so her process of protection kicks in every time it's required- ahead of time. Which is why she often talks about Rolling returns, not just last 1-3-5 year CAGR. That’s what matters more than just big numbers in a single bull run.

Do they match your style?

You and your fund manager don’t need to be best friends. But you do need to match on how you think about money. Some managers are constantly moving things around, looking for short-term wins. Others believe in picking strong businesses and holding for the long haul. Who is better?

Well, neither is wrong. But it needs to work for you. If you get anxious every time the Nifty drops, maybe avoid the high-risk, high-churn guys. And if you’re a long-term investor, stay away from someone making big quarterly changes .

Ask them real questions. Like “What’s the biggest mistake you’ve made with your own money?” The answer will tell you more about their mindset than any pitch ever could.

Substance Over Style

It’s easy to get impressed- glossy brochures, sleek offices in top business hubs, and buzzwords like “multi-asset alpha” flying around. And yes, many fund managers now show up on social media too, breaking down markets and building their brand. It's great to see them educate and engage openly.

There’s nothing wrong with any of that.

But what truly matters is substance.

The best fund managers are not just good on camera, they're even better with your capital. They’re here to grow your money, with care and consistency. Don't get carried away by what they say on social media (or those who don't say anything at all)- numbers, numbers, numbers.

There is no perfect fund manager. But there are some 'more right for you'.

At the end of the day, you don’t need just a genius. You need someone who’s responsible, and who will treat your money like their own. Someone who’s not just there talking big in bull markets, but also sharing clarity and calm in the stormy ones.

This blog is adapted from Klarman’s original piece but brought into our world. Our market. Our realities. If you’re ever unsure about a fund manager or don’t know what questions to ask, reach out. It’s always better to talk than to guess.