Centrum PMS
PMSIME's View on Centrum PMS
AMC View
Centrum's mid and small-cap strategies have historically performed well under different investment teams. Abhishek Anand was a fund manager under CIOs Kunj Bansal and Anil Sarin, but both quit in 2023-24 and have been replaced by Manish Jain and Atul Fateh. It is unclear how much the investment strategies will change under the new team. We do not actively recommend Centrum strategies until the new team stabilizes, leading to its lower 2-star rating.
AMC Pedigree
Centrum is a reputable financial services firm known for its small and mid-cap investing. Recent exits of senior business heads in their wealth division and the departure of Anil Sarin may lead to management transition issues. Their wealth and AMC businesses are in a rebuilding phase, resulting in a lower pedigree rating.
Team Pedigree
We are concerned about the high turnover at Centrum AMC, with the recent departures of primary FM Abhishek Anand and CIO Anil Sarin in 2023-24. This follows previous churn at the CIO level, with Kunj Bansal leaving. While the new investment team has reasonable experience, we will wait for them to stabilize before recommending them more actively.
Investment Philosophy
The investment philosophy utilizes the EDGE framework to identify leadership among companies in 'Value', 'Quality', and 'Growth' styles. It provides flexibility to the investment team, which can be beneficial or detrimental depending on execution.
PMS Background
Centrum PMS is the PMS house of the Centrum group (a well-respected financial services group founded in 1997, with lending, broking and investment management arms). Small & mid-cap focused AMC Centrum is a well-respected financial services house that has built reasonable investment management credentials, especially on the small & mid cap space. Experienced Investment Team Anil Sarin and Abhishek Anand are seasoned professionals in fund management. Anil Sarin comes with 25+ years of experience in fund management and has been recognised for managing funds at Birla, ICICI Pru & Birla. While Anil Sarin joined Centrum in 2018, Abhishek Anand has been at Centrum PMS since it's inception. The investment team is well supported by a 6-person research analyst team.PMS Investment Philosophy
Centrum PMS is driven by their proprietary framework developed over time -- 'EDGE' Framework. The AMC uses the EDGE framework to identify leaders.EDGE Framework
- Earnings Growth (E): driven by criteria such as minimum ~15% EBITDA growth and ~15% ROCE | High cash to EBITDA ratio (65% and above) | Low leverage (<2x) | used as a filter
- Deep Dive Research (D): driven by factors like size of the opportunity, competitive advantage, scalability and channel checks
- Governance (G): evaluated based on accounting quality, past capital allocation, past related party transactions and dividend policy
- Execution (E): past track record and promise vs delivery historically
Leadership traits are defined as
- Market Share
- Promoter/Management Pedigree
- Operating Margins and Return Ratios
- Brand/Distribution Strength
- Business Growth and Pricing Power
- R&D and Technology Differentiators
Portfolio Construction Strategy
Centrum strategies classify and take positions in companies labelled as 'Quality', 'Value', and 'Growth'. The aim is to have approximately equal weightages across the 3 styles- Quality (for stability): Companies with a strong leadership positions, known for their proven track record
- Value (back-ended performance, but strong upsides): counter cyclical, contrarian, special situation opportunities
- Growth (for alpha): emerging but lesser-known companies with high growth potential and leadership traits
Investment team
Manish Jain | 3-star rated FM
CIO | 19 yrs Experience | 2 yrs at current firm
Past Experience: Analyst (Nomura, Lehman Bros, Enam, ICICI Sec, Motilal), FM (Ambit)
Manish Jain is the CIO of Centrum PMS. He has a strong research foundation, having worked as a research analyst at Nomura, Lehman Bros, Enam, ICICI Sec and Motilal. His core areas of research focus have been on the consumer & auto sectors.
