Aequitas Opportunities Product
Our view on the fund, the AMC, the strategy, the performance & the investment team.
IME's Review of Aequitas Opportunities Product
| Fund Rating | Strategy Rating | Performance Rating |
|---|---|---|
Upgrade | Upgrade | Upgrade |
View on the Fund
While Aeuqitas Opportunities does have a very strong past performance track record, the unfortunate demise of it's founder who was core to investment decisions, makes the relevance of this past performance unclear. How much the investment styles, processes and philosophies change under a new CIO would be key to understand, and this is something which will take a few years to settle. There is also a risk of potential fund outflows, which could put pressure on performance of the fund in the near-term. The high 25 cr investement limit (an AIF with a lower 3 cr limit exists) is also a considerable bottleneck.
Strategy
Focus on small undiscovered companies
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). However, we would need to wait to see if a new CIO changes the strategy in any manner.
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.
Trailing Performance
| 1yr | 3yr | 5yr | Since Inception | |
|---|---|---|---|---|
| Aequitas Opportunities Product | 62.3 | 52.5 | 49.2 | 34.4 |
| S&P BSE 500 | 6.5 | 15 | 15 | 13 |
| Alpha over Broad Mkt BM | 55.8 | 37.5 | 34.2 | 21.4 |
| Nifty Smallcap 250 | -0.6 | 19.4 | 20.6 | |
| Alpha over Category BM | 62.9 | 33.1 | 28.6 |
Performance as of: 31-Jan-26 | Inception Date: 01-Feb-13 | Performance are post-fees, pre-taxes. Global funds denominated in USD or fund currency.
Investment team
IME's Review of Aequitas PMS
| AMC Rating | Pedigree Rating | Team Rating | Philosophy Rating |
|---|---|---|---|
Upgrade | Upgrade | Upgrade | Upgrade |
View on AMC
Post the unfortunate & untimely demise of Aequitas's founder (Siddhartha Bhaiya), Aequitas is likely to go through a difficult & unpredictable transition. As a firm, it was very dependent on the investment philosophy & vision of Siddhartha, and the person to come in and replace him is likely to have their own philosophy & style. Accordingly past performance under Siddhartha, cannot be extrapolated under new management, and we would have to wait to see how the new team shapes up before firming up a view.
AMC's Pedigree
Aequitas had 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. However, this pedigree effectively gets very significantly impacted post the demise of the founder and will have to be rebuilt by the new team.
AMC Team
Aequitas's team is known for founder Siddhartha Bhaiya's successful track record in selecting small-cap stocks. We will need to understand the team that comes in to replace him, and their past track to get a proper sense.
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. How much this philosophy may change under the new team is still unclear.
AMC Background
The combination of a founder-led investment approach, a proven long-term track record, and a clear specialisation in identifying small-cap winners makes Aequitas a strong AMC for more aggressive investors. The firm has built its credentials on the back of sustained outperformance driven by Siddhartha Bhaiya’s small-cap stock selection, allowing the AMC to scale meaningfully and establish itself as a specialist in the small-cap segment.
Investment Philosophy
Aequitas’s investment philosophy is centred on delivering outsized returns by investing in undiscovered small-cap companies. The strategy does not follow a model portfolio approach; instead, portfolios are customised for individual clients. Multi-bagger identification is driven by a combination of high growth potential, contrarian positioning, and value characteristics that enable stock re-rating over a 3–5 year investment horizon. Portfolios are typically constructed with around 20 stocks, balanced across sectors and supported by clear re-rating catalysts.
Multibagger Approach
- Growth: Companies with above-average growth potential over the foreseeable future.
- Contrarian: Focus on undiscovered opportunities while avoiding crowded or popular names.
- Value: Businesses with clear potential for valuation re-rating.
The combination of earnings growth and P/E re-rating is central to identifying multi-bagger opportunities.
Selection Criteria
- Industry Leaders: Companies with sustainable competitive advantages within their industries.
- Management Quality: Strong corporate governance and consistent long-term execution.
- Valuations: Portfolio valuation maintained below broader market P/E levels.
- Creeping Acquisitions / Buybacks: Preference for companies with promoter buybacks or creeping acquisitions, a common trait among past successful investments.
- Low Debt & Cash Flows: Focus on low leverage or net-cash balance sheets with consistent cash generation.
Suitable For
- High-risk, aggressive investors seeking outsized returns through concentrated exposure to small-cap and emerging businesses.
- Investors comfortable with higher volatility, drawdowns, and longer holding periods typically associated with small-cap investing.
- Investors meeting the minimum investment ticket size requirements, making the strategy more suitable for higher net-worth individuals.
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