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Solidarity PMS

PMS Rating

IME PMS Rating

3 of 5 stars

Highly recommended for aggressive investors looking for Multi Cap strategies with PE Style Approach: Investing in Solidarity PMS is essentially investing with Manish Gupta and taking a call on his ability to leverage his substantial experience in corporate strategy & private equity to deliver outperformance while managing listed equities. The premise is interesting, but we would ideally like to wait a few more years to analyse performance across market cycles.

The PMS/AIF AMC Rating is derived on the basis of our analysis on 5 key qualitative parameters that we use to analyse the quality of a PMS/AIF Provider. These include an assessment of the size of the AMC, the pedigree of the AMC, the pedigree of the team, the value of the investment philosophy & the level of differentiation. These insights of our central research team are documented in the IME RMS, and can be accessed during a consultation call with an IME PMS specialist.

PMS Background

Discretionary AUM (1591cr) | Promoter Category ()

AMC Background

Solidarity PMS was founded in 2014 by Manish Gupta, a seasoned private equity professional (managed the PE investments for Rakesh Jhunjhunwala) with a strong experience in corporate strategy (BCG, Honeywell).

Investment Philosophy

Investment Philosophy driven by 'Is this company we would like to own?'

  • Broadly Predictable Growth: Companies with large addressable markets, and structural industries tailwinds
  • Improving Edge: Favourable industry structure, sector/niche leadership, competitive advantage and ability to deploy capital for growth at ROE >15%
  • Disciplined Management: Focus on few business lines, disciplined capital allocation, prudent use of leverage and learning organisation.

Things that Solidarity does not do

  • Don’t believe in model portfolios: model portfolios imply that current valuations do not matter, so the strategy invests in the best opportunities at present
  • No cash calls based on macro events

Valuations

Sensitive to growth stage of the life cycle. With more mature business growth, the higher the need for valuation sensitivity.

Portfolio Construction

  • Portfolio Allocation: 40-50% in ‘Clear Leaders’, 40-50% in ‘Emerging Leaders’, and ~10% in ‘Special Situations’.
    • Clear Leaders (15-18% IRR Ask): Leaders in a growing market, with dominant share of the profit pool and robust business model & balance sheet.
    • Emerging Leaders (18%+ IRR Ask): on path to becoming leaders, typically in a specific niche
    • Special Situations (25% IRR Ask): good businesses undergoing temporary uncertainty with high price-value divergence.
  • Concentration: 15-20 companies with minimum 3% position size
  • Position sizing: may vary between 3-15%
  • Risk Management: Avoid poor governance and excess leverage. Volatility is not risk.
  • Sell: 1) euphoria in valuations and/or 2) new facts change the view

Inv Team

Investment Team

Manish Gupta | 4-star rated FM

Founder & CIO | 27 yrs Experience | 10 yrs at current firm

Past Experience: RARE Enterprises (MD-Private Equity), Honeywell (Director-Strategy), BCG (Strategy Consultant)

Prior to founding Solidarity in 2014, Manish worked with Rakesh Jhunjhunwala for 8 years as the Managing Director for Private Equity Investments at Rare Enterprises. His prior experience includes 7 years of strategy consulting with the Boston Consulting Group.

PMS/AIF Schemes

PMS & Listed Equity AIF Schemes

Scheme Category Style 1 yr 3 yr 5 yr Since Inc
Solidarity Prudence Flexi Cap GARP 16.9 10.6 19.5 18.4

Returns as of 30-June-24.

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