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Aequitas Opportunities Product

Scheme Rating

IME Scheme Rating

4 of 5 stars

Solid small-cap fund but high min requirement: 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).

IME Strategy Rating

4 of 5 stars

Focus on small undiscovered companies: 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).

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 Aequitas Opportunities Product

Type: | | AUM (3324 cr) | Inc Date (1 Feb 2013)

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 34.7 38.5 41.1 33.6
S&P BSE 500 TRI 41.1 18.9 22.9 14.6
Alpha over Broad Mkt BM -6.4 19.6 18.2 19
Nifty Smallcap 250 52.3 27.1 32.6
Alpha over Category BM -17.6 11.4 8.5

Performance as of: 31-Aug-24 | Inception Date: 01-Feb-13

Fund Managers

Siddhartha Bhaiya | 4-star rated FM

MD & Fund Manager | 19 yrs Experience | 12 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.

Fee Structure

Fee StructureFee
Fixed Fee Structure2
Variable Fee Structures0% fixed + 10% above no hurdle
Exit Fees

AMC

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

Recommended small-cap manager: The combination of a founder-fund manager, a proven longer-term track record and a clear focused specialisation in identifying small-cap winners makes Aequitas a strong AMC to invest in for more aggressive investors. The main concern is a high min investment requirement, which can be a bottleneck for many investors.

AMC Rating

4 of 5 stars

AMC Pedigree

4 of 5 stars

AMC Size

4 of 5 stars

Team Pedigree

4 of 5 stars

Inv Philosophy

4 of 5 stars

Performance

5 of 5 stars

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