INSUBCONTINENT EXCLUSIVE:
Call them your personal money plant
Naturally, smart money is flowing to them since alpha is more than an adjective for these custodians of your wealth
Shailesh Menon
For
investors who approach him with mandates, IV Subramaniam has a wellrehearsed pitch
talks stocks and rests his case with a punchline: This market is not good for short-term gains
Stay invested long and you will make money
medium-term outlook for equities, these fund houses have managed to shore up bulk assets
Rich clients shovelled more money into bespoke schemes
During January-August, assets under management (AUM) of these wealth managers rose over Rs 86,600 crore to Rs 13.05 lakh crore and their
client rosters swelled up to 1.29 lakh from 1.11 lakh.
That the cult of equity investing has become all pervasive can be proved from just
SIP investments were steady at Rs 7,700 crore every month, underscoring the evergrowing appetite of retail investors to play the equity
market with minimum risks
Imagine what India still offers for the sophisticated moneybags
Unifi Capital, helmed by Sarath Reddy and three other founders
Unifi manages investments worthRs 4,400 crore for 3,400 clients
Its PMS book alone stands atRs 3,800 crore.
Reddy compares the art of investing to sailing, one of his passions
weekends, Reddy hauls anchor and heads out to Chennai bay on his 38-footer yacht,Vincelle of India
Sailing helps him stay alert, he says.
An ardent proponent of long-term investing, Reddy is not hassled by market dips
Our filters are designed to capture best companies at right price points
Wealth Management, which recommends Unifi portfolios to select clients.
PRIVILEGE OF THE RICHPMS is an investment portfolio comprising
equities, debt and structured products aligned to exact high returns
Minimum permissible ticket size isRs 25 lakh, but well-known portfolio managers only accept investments above Rs 50 lakh
The upper limit can be any conceivable amount
securities (shares, debt papers) are held in individual demat accounts
This is the key differentiator between PMS and mutual funds
largest portfolio manager in terms of assets and number of clients
This determines the structure of portfolios
Often, investor behaviour impacts fund performance
return pattern between PMS and MFs in the short-term, you may not see much of a variance
MFs bloated (and unwieldy) with huge retail inflow
PMS should only be a part of overall investment allocation
This is where MFs score over PMS
the mid-cap carnage in the first half of 2018, a few PMS funds posted returns of 3-6 per cent, while gains on broader indices were 0.5-3 per
On an average, most PMS funds claim to have tripled or quadrupled investments since 2013.
Most swear by smart longterm investing
Their funds have managed to spot the likes of Nilkamal, HEG, Garware, DCM Shriram, Hatsun Agro, Astral Poly and VST Tillers early on
All these stocks have gained 8-20x over the past five years
mostly companies with dodgy governance
Asset management fees could be 1-3 per cent of the monies managed
key benchmarks.
The key to running a successful PMS outfit, thus, is garnering enough asset size
And to gain size, portfolio managers will have to impress prospective investors by showing good performance
But that road is long and time-consuming
So tricksters in PMS industry simply promise high returns or pay off excess commission to distributors to bring in bulk investments.
A few
explains the chief executive of a PMS fund house
Siddhartha Bhaiya of Aequitas Investment Consultancy, which manages close toRs 1,000 crore in PMS, claims to have no distributor tie-ups
Bellwether would stop taking fresh investors once they log 500 investors and assets worthRs 2,500 crore
A well-to-do portfolio manager needs just 6-8 people to helm in-house functions
So if a portfolio manager with a Rs 200-crore book charges just 2 per cent as asset management fees, he earns Rs 4 crore every year
That aside, if the fund has outperformed markets, he is entitled to a profit share
Unfi Capital, for instance, turned profitable in the first year of its operations
No Khemka has managed to elude the stock markets in the last 100 years
It would have been a matter of great shame had Prashant Khemka not made a name for himself in the field.
When Khemka, former chief
investment officer and lead portfolio manager of Goldman Sachs India Equity (and later global emerging markets equity), decided to start his
own investment firm in 2017, it was the fulfilment of a life-long hankering.
Khemka always wanted to be an entrepreneur but loved stock
He bought his first share as a 13-year-old in 1985 and was hooked
IDFC MF) to start their own ventures
their jobs at Rothschild and Credit Suisse First Boston in 2003
The duo got offers from Lazard India and Credit Lyonnais a few months later, but backed out to start their own fund
We did not have a track record or credibility
may stand out among most portfolio managers
Both are engineers and held very senior positions at Adobe before starting their own quant/algo-driven PMS house.
Accuracap claims to have a
book of Rs 1,200 crore (Rs 600 crore each of PMS and proprietary book) across 400 clients
others.
Greed is good, noRs
