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Birla AMC Innovation

Scheme Rating

IME Scheme Rating

The Scheme does not meet our selection criteria at this time

Not a recommended fund: This is not a recommended fund, primarily because the AMC does not meet our selection criteria. We believe that there are better fund houses to invest in, within the Indian mutual fund universe.

IME Strategy Rating

Strategy Definition not as tight as our preferences: It is an interesting thematic concept aims to identify companies that create value by actively innovating across products/processes. While it is positioned as an innovation fund, the strategy definition requires only 50-75% of the portfolio to be invested in Innovation-driven companies. Additionally, the definition of what comprises innovation to quality for inclusion in the portfolio is unclear.

PMS Scheme Ratings are driven by IME’s Proprietary Scheme Rating Methodology, which takes into account our ratings of the Scheme’s investment strategy, its maturity, the investment team, and our separate rating on the AMC that runs this particular scheme. Our views on each of these individual criteria are available via the IME RMS – which you can view by reaching out to one of our relationship managers (using either the live chat or book appointment feature on this site).

IME View on Birla AMC Innovation

Type: Others | Thematic | AUM (76.3 cr) | Inc Date (24 Apr 2018)

Aditya Birla Capital Innovation- Investment Strategy

Seeking for companies that create value by actively innovating across products/processes

Birla PMS’s Innovation strategy aims to identify companies that create value by actively innovating across products/processes. Between 50-75% of the portfolio will be invested in companies under the innovation framework, with the balance invested in secular growth companies.

Innovation defined by

Innovation is defined by the following categories: 

  • Business Model: Business model is further classified into different types of innovation- Profit Model, Network, Structure, Process
  • Product Offering: Product offering is further classified into Product Performance and Product System.
  • Customer Experience: This is also classified into Service, Channel, Brand, Customer Engagement.

Investment Process

  1. Track the Investment Universe on a monthly basis (by applying Quantitative & Qualitative Screeners tracking [ ROE/ROCE, leverage and debt servicing, management quality]
  2. Reject the companies which do not filter through the screeners, and identufy companies that benefit from the catalysts.[Micro/Macro Turnaround, Demerger/Deleveraging, Management Change]
  3. Narrow down the list to 50-60 stock by portfolio optimisation by looking at [Risk/Reward Analysis, Potential upside of 100% in 3-4 years]
  4. Select 15-25 quality companies with high growth and potential upside. 

Portfolio Construction

Portfolio constructed by having an exposure to innovation and secular growth.

Innovation (50-75%) weightage to capture maximum value in fast changing landscape across industries through product or process innovation. ( Stocks such as Biocon, Bayer Cropsience, HDFC Life Insurance) 

Secular growth having 25-50% weightage in order for scalability in the form of market size over the next decade. (stocks such as Bharti Airtel, Ion Exchange (India). 

Stock exposure limit: 10% of cost

Trailing Performance

1yr 3yr 5yr Since Inception
Birla AMC Innovation 39.6 20.8 23.3 19.7
S&P BSE 500 TRI 39.5 19.5 19 15.4
Alpha over Broad Mkt BM 0.1 1.3 4.3 4.3

Performance as of: 28-Feb-23 | Inception Date: 24-Apr-18

Fund Managers

Natasha Lulla | 3-star rated FM

Fund Manager | 17 yrs Experience | 12 yrs at current firm

Past Experience: Goldman Sachs (Analyst)

Natasha has been with Birla AMC PMS for over 8 years, having joined Birla AMC as a analyst in Apr-2012. Prior to joining Birla, Natasha worked as an Analyst at Goldman Sachs.

Vishal Gajwani | 2-star rated FM

Fund Manager | 18 yrs Experience | 7 yrs at current firm

Past Experience: Birla MF (FM), Reliance Capital (Asst FM)

Vishal has over a decade of buy-side equity experience, having worked as analyst at Reliance AMC, prior to joining BIrla MF where he worked as a Fund Manager prior to joining the PMS division.

Fee Structure

Fee StructureFee
Fixed Fee Structure2.5
Variable Fee Structures1% fixed + 20% above 12% hurdle
Exit Fees1yr(3%), 2yr(2%)

AMC

AMC: Birla AMC PMS (click link for detailed AMC review)

Not a top recommendation due to being an AMC-driven PMS: Birla AMC PMS suffers from the common ailments of large AMC-driven PMS houses (PMS as an add-on instead of a clearly segregated business unit, churn in the investment team, a lack of skin in the game for the CIO and typically loosely defined investment philosophies). While the distribution strengths of the AMC can help the PMS scale and there are benefits of research access, most AMC driven PMS's cannot compare to strong CIO-cum-founder driven PMS houses.

AMC Rating

3 of 5 stars

AMC Pedigree

3 of 5 stars

AMC Size

4 of 5 stars

Team Pedigree

3 of 5 stars

Inv Philosophy

1 of 5 stars

Performance

2 of 5 stars

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Note: PMS AMC & Scheme Reviews and Ratings are based on IME Capital’s Proprietary Review and Rating Methodology (read more here: AMC Rating & Scheme Ratings). These reflect the unbiased views of our central research team, based on our assessment of the investment value of these PMS/AIF strategies for our investors. We follow a highly stringent rating-criteria, where approximately 50% of PMS AMC’s & strategies would be rated 2-star or below (this is not meant to indicate that these funds are not investment-worthy, but that they do not currently fulfill the requirements we focus on for recommending funds to our investors — based on our internal views on the merit of the AMC/strategy relative to peers). Reviews & Ratings are primarily based on research of publicly available information (SEBI disclosures, PMS websites, PMS-aggregation platforms, webinar recording, media interviews etc.) and no explicit consent is required from AMCs for the same. While we endeavour to do further due-diligence via direct interactions with the investment teams of AMCs, this is typically restricted to AMC’s that meet our foundational fund selection criteria (reviews on lower-rated AMCs are often based solely on publicly available information). The views reflected in our Reviews & Ratings, are our independent views and may not be shared by the AMC’s and the investment teams. Please read detailed disclaimer for more.