Investment approach
Bottom-up research, quality first, held for the long term
The approach is deliberately simple, because discipline is easier to hold when the rules are few and the reasons for them are understood.
Principles
The rules the portfolio is built on
Few rules, understood well, so that they hold when markets are moving fast.
Bottom-up, not top-down
The starting point is a business, not a forecast for the economy. The firm reads the accounts, understands how the company earns, and forms a view on what it is worth before it forms one on where the index is going.
Quality first
Preference for businesses that generate cash, carry manageable debt, and are run by managements whose past conduct can be checked. Governance is treated as an investment question, not a compliance one.
Concentration with conviction
Capital goes to a limited number of positions understood in depth. A portfolio spread too thin cannot outperform, and one held without conviction cannot survive a drawdown.
Time, not timing
Positions are held while the thesis holds. The intent is to give a good business the years it needs to compound, rather than to trade around quarterly noise.
Research process
From an idea to a position, and out again
Each position goes through the same sequence, and the same questions are asked at every step.
- Step 01
Idea generation
Ideas are generated in-house, from screening, sector tracking and the partners' own reading, rather than taken off a broker's list.
- Step 02
Sector assessment
Where the sector sits in its own cycle, what is driving demand, and whether the tailwind is structural or temporary.
- Step 03
Company due diligence
Financial statements read in full, unit economics understood, and promoter conduct and related-party history examined.
- Step 04
Valuation and sizing
A view on intrinsic value, the margin of safety at the current price, and a position size proportionate to conviction and to the risk being taken.
- Step 05
Monitoring and exit
The thesis is re-tested against results as they come. A position is sold when the thesis breaks or the value is realised, not because the price has moved.
In a business
What the research looks for
The Fund's market focus is listed Indian equities. Within it, the research weighs the same things in every company it looks at.
A business model that can scale
Scalable business models with long-term growth visibility, rather than a single good year.
Governance and management
Governance standards and the quality of the people running the business, judged on the record.
Competitive position
Where the business stands against its competitors, and whether that position can be defended.
Earnings that last
The sustainability of earnings, looked at across cycles rather than from one quarter.
Capital allocation
Disciplined capital allocation, both by the business itself and in how each position is sized.
Insights
Further reading on the approach
Approach
Bottom-up, not top-down: why the work starts with the business
The starting point is a business, not a forecast for the economy. What that means in practice, and where the wider economy still enters the picture.
Process
How an idea becomes a position
From idea generation to monitoring and exit: the stages an idea passes through before it becomes a position in the portfolio, and what can stop it on the way.
Approach
Quality first: governance as an investment question
Cash generation, manageable debt and a management whose past conduct can be checked. Why governance is treated as an investment question, not a compliance one.
Before you read further
Risk, and what this website is not
Investment in the Fund carries risk, including the possible loss of capital. Equity markets are volatile, and a Category III Alternative Investment Fund may use leverage and complex strategies. There is no assurance of return.
This website describes the firm, its people and its approach. It does not set out the commercial terms of the Fund. Fees, the minimum commitment, the tenure, the distribution waterfall, investor rights and the full risk factors are set out exclusively in the Private Placement Memorandum and the definitive fund documents, which a prospective investor must read in full. Any figure on this website that is subject to change, including the SEBI registration particulars, should be verified against the current filings before it is relied upon.
Contact
Speak with the firm
Eligible investors, distributors and professional advisers can write to the firm or call the registered office in Ahmedabad. Units are offered only by private placement, under the Private Placement Memorandum.