We believe in investing heavily in resources (perhaps the largest research team among our peers) and developed in-house systems and processes that we follow rigorously to achieve consistency in our decision making. With a large team, we are not only able to sift through a legion of possible investment ideas to identify right names for investment but also spend sufficient time warranted by the rigor embedded in our analytical process.

We focus on process driven investing and have developed proprietary analytical models and methods which we follow rigorously to identify companies with superior risk-reward characteristics. A comprehensive set of rules guide us in our investment process and arguably reduce individual biases and mistakes.

We pursue an absolute return strategy and invest in equities with a long term (three year plus) horizon but do not restrict ourselves to any specific holding period. We experienced one of the fastest first year ramps in the industry and already have equity assets under management exceeding Rs. 280 crore (USD 45mn).  We count some very prominent and globally recognizable names as our valuable clients. We have an additional advantage of being able to invest also in small and midsize companies that are outside the radar of many large investors but offer opportunity for high returns because of both growth in earnings as well as valuation. We do not follow model portfolio approach prevalent among our peers and instead structure portfolios based on merits of fresh investments at any given point in time. We have been able to deliver strong absolute and relative performance without taking full market exposure. Most importantly, we believe in earning from performance and our unique fee structure (Industry’s lowest fixed fees for management) is designed in accordance with that principle.

Fund Objective and Strategy

    • Provide superior long term returns while protecting against permanent loss of capital using Long biased strategy:
        • Invest in long-term growth opportunities in Indian companies across market capitalization  (with greater emphasis on mid and small cap companies that are not fully discovered) that have superior business model, sufficiently large market opportunity to deliver growth, strong and shareholder focused management and are available at price that would result in sufficiently attractive risk adjusted returns over a horizon of at least two years
        • Have an option of investing in Index Futures in order to partially hedge the portfolio
        • Manage market exposure by modulating cash position in the portfolio depending on the opportunity set and attractiveness of investment ideas and through the use of index futures and options
    • Follow rigorous fundamental research-driven and rule based investment process that is disciplined and yet leaves enough room for creativity and ingenuity; Investment process entails interactions with the companies through common as well as uncommon means, detailed financial model on the company as well as the industry to properly size up the growth opportunity, completion of a detailed check-list and review of investment argument by the entire research team
    • Employe a  full strength research team (currently six analysts) that we deem  necessary to allow for very detailed research on every investment opportunity
    • Focus on long-term return and hence may experience short term volatility, but will use its research capability to minimize the permanent loss of capital and will adhere to established risk guidelines

  Right set of skills, values, opportunity and approach

The Opportunity:-

  • India is in the early stages of cyclical upturn and healthy growth is likely to continue for long-term. With a young and growing population, the Indian economy will enjoy strong growth for a longer horizon than many other large economies of the world.
  • Penetration levels and consumption per capita levels of a vast range of products and services suggest a long period ahead of high single digit to double digit growth. This creates numerous opportunities to invest in established as well as emerging companies.
  • India is not one market but many markets: Urban versus Rural, Bottom of the pyramid all the way to the super luxury. As such, Indian economy is already large to offer sizable growth opportunity for a whole range of goods and services covering the entire spectrum of luxury to bare necessity.
  • Government is in full throttle mode to revive manufacturing in India. India possesses competitive advantage to achieve this. Availability of cheap abundant labour allows manufacturing-oriented companies to create competitive advantage and gain share in the global market.
  • Indian Paradox: Though India has been a difficult place to do business, there is a strong entrepreneurship culture that leads to formation and scaling up of some great companies. These companies erect competitive barriers and earn high returns on capital.
  • Mid cap equities in India have delivered impressive returns; CNX mid-cap index has delivered CAGR returns over last fifteen-years (till December 31, 2017) of 22.6% and 20.2% in INR and USD respectively.
  • India Story

○ India: Multiple market across the value spectrum

○  The Indian Paradox: Adverse business conditions allow successful companies to erect competitive barriers

○ Make in India pushes the government to do the right thing

○ Indian equities have delivered superior returns in INR as well as USD

○ Shift from high inflation-low growth to low inflation-healthy growth

  • Target Universe

○ Target Zone: We catch them Young when they are yet to be noticed by others

○ Investment Framework validates across entire market spectrum

Multiple drivers creating a wide range of opportunities…

Competence:
  • Experience: Two Fund managers with complementary but rich and relevant experience and track record backed by a full size research team based in Ahmedabad, India. Prior experience in technology industry and as a technology analyst. Pushes us to think about future disruptions to an industry that could result in obsolescence or substitution.
  • Ability to identify and access relatively undiscovered companies: Have been following a strategy of reaching out to companies relatively unknown to market for last eight years. Have identified more than three dozen stocks that delivered many fold returns over this period. In many cases, there was absolutely no sell side research on such companies.
  • Being able to reach out to top management: We have experience of dealing with management of companies as small as $50 mn market cap to $100 mn market cap. We were first call for some of biggest tech companies in Asia (TSMC, Infosys) when they sought market input. As such, business owners and CEOs talk to us because we have reputation in the market and we add value by providing insights to the company on issues ranging from financing options to capital allocation to dividend policy and other topics. Such meetings prove very valuable in our decision making. In the process, we are also able to source liquidity at times.
  • Roll-up the sleeves approach to access and understand businesses: We put our on-the-ground presence to smart use and spare no effort even if it means travelling to remote corners of the country with no air connection. We meet companies in a situation that most of our peers would consider either inefficient or below their status. We have access to niche corporate access events where we have met companies that are otherwise not attending such events. Some great investment ideas have been identified by us through such unconventional methods.
  • Proprietary tools and process driven approach: We bring engineering mindset to equity research and have developed several proprietary tools to aid our process driven approach to both enable us to identify ideas as well as ensure consistency and improve efficiency in our decision making. Our set of tools include detailed standardized Financial Model template embedded with unique dynamic DCF/EROE to allow us to quickly build high quality financial models through which we can  fully understand value of every stock analysed and we already have a repertoire of models and notes on more than 200 companies. Our Qualitative checklist covers almost every possible aspect of equity analysis ensuring that we cover all bases.
  •  Track Record: Without taking full market exposure, we have delivered superior risk adjusted performance and have consistently beaten benchmark indices.
Our Competence:-
  • Idea Generation to Idea Selection

                  To start with wide net, but names down to select ideas

  • Investment Process

                 Defined framework to analyse companies

                 Elaborate and collaborative Investment decision Process

  • People

                  Fund Manager Profile

                 Research, Operations  and Compliance Team

  • Track Record

                  Performance of Sameeksha PMS and Personal Portfolio

Values:

Investment Discipline: Sameeksha Capital employs a proprietary multi-layered stock selection checklist to filter through a legion of stock ideas. Process based stock selection helps get rid of any personal bias. Own  ‘Value Versus Quality Matrix’ analysis for each investable idea with a high bar for quality, helps instill discipline into Buy/Hold/Sell Decisions

Qualitative and Quantitative Analysis: Detailed standardized Financial Model template embedded with unique dynamic DCF allows Sameeksha Capital’s research team to quickly build high quality financial models and enables them to fully understand value of every stock analysed.

Sameeksha Capital is entirely self funded with meaningful capital of Bhavin in the fund: Sameeksha Capital is entirely self funded, with the fund manager also managing his own equity investments through this PMS with current commitment of US $4 mn.

Interests completely aligned with the investors: Sameeksha Capital’s ingrained value system believes in earning primarily from performance. The fund charges perhaps the lowest fixed management fees in the industry. The employee incentives are totally dependent on the Fund’s ability to generate value for our clients. Though not required, Sameeksha Capital uses custodian to add additional layer of protection for its investors.

Low Fixed fees for clients; we earn only when the clients make money: We charge the Industry’s lowest fixed fees and unlike some widely known names, we do not add any hidden markups.

Performance fee based fair structure: Applicable performance fees are subject to high water mark concept and there is no catch up concept applied

Exit Fees: No exit fees for anyone invested for at least 3 years; 3% exit load in first year, 2% exit load in second year, 1% exit load in third year