Discretionary PMS: Flexicap
Investment Philosophy
Aim to invest in fundamentally strong companies based on 4P framework across the market caps for long term wealth generation.
Investment Approach
Mix of top-down and bottom-up strategy and stocks will be selected basis various factors like fundamentals, valuations, growth, etc.
Promoter
• Healthy track record of leading the business through good and bad times
• Good corporate governance with transparency, accountability and integrity
• Growth-oriented mindset
Product
• Scale of opportunity should be enormous
• Competitive situation should be such that there should be adequate profit pool for all industry participants
• Sustainable growth expectations for the long term
Profitability
• Fundamentally sound companies with healthy margins, healthy debt/equity profile, robust cash flows and return ratios
• High earning growth
• Possibility of improvement of profitability going forward
Price
• We will use multiple absolute and relative valuation parameters to assess whether valuation is reasonable or not
• We will generally stay away from extremely richly valued stocks where investor frenzy is usually very high
Why Flexicap?
Diversification
Invest in a well-diversified portfolio across various sectors and reduce concentration risk.
Adaptability
Flexibility to capitalize on opportunities in evolving market landscapes due to market agnostic approach.
Strong Conviction
More of a BUY and HOLD strategy with minimum churn.
Long-Term Growth
Invest in growth leaders where the long-term expected EPS growth is around 15-20%. This could lead to long-term wealth creation.
Discretionary PMS: Small & Midcap
Industry Potential
• Growing companies that are scalable over time
• Pricing power and benign competitive landscape
• Avoid sectors vulnerable to regulations, high-competitive intensity and short growth cycles
Business
• Companies with competitive advantages, delivering high RoCEs
• Structural growth stories with high cash flow generation with moderate to no debt (unless visible turnaround cases)
• Avoid companies with poor cash flows
Governance
• Managements with clear strategy and business model on generating shareholder value over long term
• Prudent capital allocation, in-line with minority shareholder interest
Valuations
• Offering a favorable risk-reward ratio: particularly on a cash flow valuation basis
• Valuation is not the sole investment criteria
Why Small & Midcap?
Scope for PE style investing
• Bottoms up study to identify emerging sub-sectors and companies
• Ability for value investing at a relatively earlier stage in a company’s growth cycle while avoiding “winner’s curse” of larger institutionally discovered companies
Emerging Opportunities
• Investing in sunrise sectors like green energy, recycling.
• Capitalizing on China +1 strategy, derisking supply chains
• Infrastructure focus, NCLT & Turnarounds
Ride compounding story
• Once correctly identified and comfortable with governance, ride the earnings growth story
• High earnings growth attracts institutional investors down the line
• The combination of EPS growth and PE re-rating leads to outsized returns
Discretionary PMS: Blend
Best ideas of Flexicap and Small Midcap in one investment approach
Dynamic Asset Allocation between Large, Mid and Small caps depending on the valuation and expected return
Ideal for investors seeking high growth potential combined with the flexibility and diversification for balanced, long term wealth creation
The Blend strategy captures the upside of Small & Midcap while cushioning the overall volatility of the portfolio
Discretionary PMS: Bespoke
Suitable for investors that have very specific investment needs
If a certain investor has too much exposure to a certain sector because of family business or senior management position, we can exclude that sector
If a certain investor wants excess or very little diversification, we can curate a customized portfolio
This involves understanding the client’s unique needs and providing a customized service, rather than a one-size-fits-all approach