Aequitas Opportunities Product
Aequitas PMS | Equity | | PMSIME's View on Aequitas Opportunities Product
Strategy
Focus on small undiscovered companies
Investment Fund
The combination of a founder-manager who is known to be a small-cap specialist, along with a strong longer-term track record make Aequitas a solid small-cap fund. However a 25 cr min investment size is a major bottleneck (they have an AIF offering with a 3 cr min). Additionally, it is important to note that this portfolio can have high downside volatility (as can be seen in the 50%+ fall in portfolio during the 2018-19 correction). We are still cautious about the following things (a) the high levels of volatility seen in the past (b) very aggressive calls taken - such as very high cash calls in early 2025, these can lead to strong outperformance if it works, but can also lead to sharp underperformance if not (c) not open to dealing with distributors - with limits our ability to access information that is often required to get a clearer view on a fund
Fund's Strategy View
Aequitas's Investment Philosophy revolves around delivering outsized returns, by investing in small-cap undiscovered companies. Aequitas does not follow a model portfolio approach, instead choosing to build customised portfolios for individual clients. The process of identifying multi-baggers includes investing in companies that offer a combination of high growth, a contrarian approach and stocks that offer value (providing a re-rating potential).
Fund Performance
The fund has outperformed peers & is amongst the top performing schemes in this category in the last 5 year trailing returns. In terms of longer-term annual performance, performance has been consistent, with the fund having outperformed it's benchmark in over 60% of annual calendar years.
IME's View on Aequitas PMS
View on AMC
Aequitas is a strong AMC for aggressive investors due to its founder-fund manager, proven track record in small-cap investments, and clear focus. However, the high minimum investment requirement may be a barrier for some investors.
AMC's Pedigree
Aequitas has built strong AMC credentials through Siddhartha Bhaiya's successful small-cap picks, leading to the company being recognized as a specialist in small-cap investments.
AMC Team
Aequitas's team is known for founder Siddhartha Bhaiya's successful track record in selecting small-cap stocks.
Investment Philosophy
Aequitas focuses on delivering high returns by investing in small-cap undiscovered companies with potential for significant growth. They create customized portfolios for each client, rather than using a model portfolio approach. This strategy involves investing in companies with high growth potential, a contrarian approach, and value stocks with re-rating potential.
Investment Philosophy
Aequitas's Investment Philosophy revolves around delivering outsized returns, by investing in small-cap undiscovered companies. Aequitas does not follow a model portfolio approach, instead choosing to build customised portfolios for individual clients. The process of identifying multi-baggers includes investing in companies that offer a combination of high growth, a contrarian approach and stocks that offer value (providing a re-rating potential).
The strategy aims to invest in ~20 stocks with a balance across sectors and clear catalyst for stock re-rating with an investment horizon of 3-5 years.
MULTIBAGGER APPROACH
- Growth: the company has above-average growth potential for the foreseeable future
- Contrarian: Identifying undiscovered opportunities and avoiding popular names
- Value: Company should have the potential for re-rating.
The combination of EPS growth and PE re-rating is the key essence in identifying multi-baggers.
SELECTION CRITERIA
- Industry Leaders: Aequitas focuses on companies that are industry leaders with sustainable competitive advantage
- Management: corporate governance practices and sound long-term performance a key criteria
- Valuations: portfolio PE to be lower than market PE
- Creeping Acquisition/Buybacks: A common traits of majority of successfully identified companies in the past by Aequitas were companies that have done buy-back/creeping acquisition
- Low debt & Cash Flow: Prefer low debt or net cash position on the balance sheet and generate consistent cash flows
Trailing Performance
| 1yr | 3yr | 5yr | Since Inception | |
|---|---|---|---|---|
| Aequitas Opportunities Product | 25.3 | 43.5 | 46.2 | 32.6 |
| S&P BSE 500 | -6.6 | 14.7 | 19.2 | 13.1 |
| Alpha over Broad Mkt BM | 31.9 | 28.8 | 27 | 19.5 |
| Nifty Smallcap 250 | -9.3 | 21.5 | 27.2 | |
| Alpha over Category BM | 34.6 | 22 | 19 |
Performance as of: 30-Sep-25 | Inception Date: 01-Feb-13 | Performance are post-fees, pre-taxes. Global funds denominated in USD or fund currency.
Investment team
Siddhartha Bhaiya | 5-star rated FM
MD & Fund Manager | 21 yrs Experience | 13 yrs at current firm
Past Experience: Fund Manager (Nippon India MF)
Siddhartha a qualified Chartered Accountant is the driving force behind Aequitas & has over 13 years of experience into Equity research and Equity Fund Management. Siddhartha started his career as a Research Analyst with Sushil Finance and has worked with Strat cap Securities. Principal PNB AMC & Reliance Capital Asset Management (RCAM). Siddhartha has developed his fund management credentials at Aequitas where he has demonstrated strong longer-term outperformance based on his small-cap picks.
