Proportion may increase to avoid uncomfortable valuations in rest of the businesses and the difference should be treated as “quasi cash.
India being a developing country is witnessing evolution of strong business
from the unstructured economy. These businesses have given consistently
higher returns across cycles and have gained market share during disruption via. consolidation like in demonetization, GST etc. as big gets bigger and stronger through market share gains. We have shortlisted such business in our investible universe and call them as “Structural” and we intend to generate returns from these businesses
consistently
Our research suggest barring few indispensable businesses like banking, technology, food, healthcare and consumer durables, rest of the business will have deep cycles. Well Run But Volatile & Cyclical We believe sectors like metals, infrastructure, commodities etc. have wide implications from internal and external factors like monetary policy, fiscal policy, interest rates, global commodity cycles, currency etc. We identify them as “Sectoral” ideas.
We intend to invest at bottom of the cycle in this sector without breaching our filters of scale, returns, technology, leadership and governance. There will be instances where the line of demarcation between structural and sectoral will be blurred according to individual perceptions, but we will follow our guiding principles diligently.
Our research suggest barring few indispensable businesses like banking, technology, food, healthcare and consumer durables, rest of the business will have deep cycles. Well Run But Volatile & Cyclical We believe sectors like metals, infrastructure, commodities etc. have wide implications from internal and external factors like monetary policy, fiscal policy, interest rates, global commodity cycles, currency etc. We identify them as “Sectoral” ideas.
We intend to invest at bottom of the cycle in this sector without breaching our filters of scale, returns, technology, leadership and governance. There will be instances where the line of demarcation between structural and sectoral will be blurred according to individual perceptions, but we will follow our guiding principles diligently.
Alpha” is our business secret – we intend to outperform our peers by being opportunistic in certain businesses. The investible universe of “Alpha” is open and will be dynamic and opportunistic. We would not refrain from reversing our investments in “Alpha” category if our bets don’t work in predefined timelines.
Long term capital appreciation by primarily investing in businesses through equity and equity related instruments across market capitalization.
The fund will be investing in a balanced mix of large cap, mid cap, and small cap companies.
This scheme is for high-risk investors who by nature are long-term but are dynamic in their approach.
They have a higher appetite for both risk and return and obsess for higher IRR on a small portion of their overall capital. This scheme gives an opportunity to otherwise conversant investors to test their hypothesis, play cycles, sectors, and macro & micro events.
This scheme is recommended for the informed investors who understand the basic premise of financial markets where risk and returns move in tandem, and we assume the investor understands and is capable of choosing a point on isoquant curve (risk reward graph).
We retain our investments in Structural businesses and allow them to compound unless their strengths get challenged/ retested. We obsess about risk reward trade- off in Sectoral and Alpha category of businesses. If risk – reward is not compelling enough in Sectoral and Alpha, we shift investments to Structural.
