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Avendus Absolute Return Fund AIF

Scheme Rating

IME Scheme Rating

5 of 5 stars

Highly recommended Absolute Return strategy: As one of the oldest & largest absolute return long-short strategies in India, Avendus Absolute Return is a highly recommended Absolute Return focused long-short strategy.

IME Strategy Rating

5 of 5 stars

Absolute Return Long-Short Strategy: Unlike other long-short strategies, where net long positions can vary substantially leading to higher volatility in returns, Avendus Absolute Return AIF is structured as an absolute return product (aim to deliver low-teen pre-tax returns on a consistent basis) by not taking very aggressive calls on net long or net short positions. The long-short strategy essentially helps earn returns independent of equity market cycles & interest movements. Provided the investment team’s calls go correctly, this can provide consistent absolute returns regardless of market conditions. There appears to be a minor long bias (about 15-25% net long in good market conditions), which makes this more comparable to a conservative hybrid fund (as compared to a pure debt fund).

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 Avendus Absolute Return Fund AIF

Type: Absolute LS | Absolute Return LS | AUM ( cr) | Inc Date (10 Mar 2017)

Investment Philosophy

Avendus Capital’s Absolute Return Fund aims to produce absolute returns with low volatility, across different market scenarios. This portfolio has a low correlation with conventional asset classes.

Key Aspects of Long Ideas

  • Fundamental Parameters: Robust Business Model, Corporate governance, earnings and balance sheet quality, and valuation pattern
  • Thematic Parameters: Changing consumer behaviour, market leadership, regulatory and tech changes and structural sectoral changes
  • Technical Parameters: Market-cap, institutional holding, liquidity, technical charts, event-driven, and tactical trades

Key Aspects of Sell Ideas

  • Catalyst: technical factors, management changes, financial reporting
  • Structural positioning: weak competitive position, structurally endangered and markets, political risk, and corporate governance
  • Valuation: trading on premium multiples, and share price above target price
  • Market Capitalizations: > Rs 750Crs.
  • Key Company Features: Filter out businesses which may not create EVA on a sustainable basis, with a global presence in B2C, conglomerates, global commodities, ESG issues, PSUs, difficult to understand, and not scalable

Risk Management

  • Gross Exposure: Max 200%
  • Long and short position: Max 10%
  • Long only- Stop loss limits: 20% Review limit
  • Review: 4% daily and 10% monthly loss review limit
 

Trailing Performance

1yr 3yr 5yr Since Inception
Avendus Absolute Return Fund AIF

Performance as of: 30-Dec-99 | Inception Date: 10-Mar-17

Fund Managers

Andrew Holland | 5-star rated FM

CEO | 27 yrs Experience | 7 yrs at current firm

Past Experience: Ambit Investment Advisors (CEO & Hedge FM), DSP ML (Head of Resarch, Head of Proprietary Trading), Credit Suisse (Head of Research)

Andrew Holland is the most recognised long-short fund manager in India, with an impeccable track record with top-tier funds. Prior to joining Avendus in 2006, he built Ambit’s hedge fund into one of India’s most successful hedge funds, prior to which he managed a $1 bn+ proprietary book at DSL ML.

Nandik Mallik | 2-star rated FM

Sr Portfolio Manager | 17 yrs Experience | 7 yrs at current firm

Past Experience: Fund Manager (Edelweiss Capital), Commodities Investor Sales (Credit Suisse)

Nandik Mallik has 10 years of experience in Indian equity markets. Prior to ICICI Long Short, Nandik was a Fund Manager at Edelweiss Capital. Nandik has graduated from London Business School with MSc Finance and had also completed his MBA from IIM Calcutta in 2005.

Fee Structure

Fee StructureFee
Fixed Fee Structure
Variable Fee Structures1% fixed + 15% above 8% hurdle
Exit FeesNil

AMC

AMC: Avendus AIF (click link for detailed AMC review)

Highly recommended for investors seeking Debt+ Returns : For investors seeking absolute return long-short strategies, Avendus Capital AIF is amongst the best investment options, given the very high pedigree of their core founding & investment management team.

AMC Rating

5 of 5 stars

AMC Pedigree

5 of 5 stars

AMC Size

5 of 5 stars

Team Pedigree

5 of 5 stars

Inv Philosophy

5 of 5 stars

Performance

4 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.