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Carnelian Shift

Scheme Rating

IME Scheme Rating

4 of 5 stars

Can be considered for investments: Carnelian Shift is a strategy aimed at identifying investment opportunities in manufacturing and technology. While Carnelian is a relatively young AMC, they are backed by experienced finance professionals albeit ones that lack a public track record of fund management and a good start to performance in the PMS.

IME Strategy Rating

4 of 5 stars

Strategy focused on 2 major themes – Manufacturing & Technology: Carnelian Shift is a long-only Mid & small-cap strategy, focused on investing in 2 key themes – manufacturing & technology. The focus is on mid & small-cap companies with existing core competencies, strong BS, governance and returns ratios.

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 Carnelian Shift

Type: Flexi Cap | Flexible | AUM (2852.7 cr) | Inc Date (6 Oct 2020)

Investment Strategy

Carnelian Shift is designed to find attractive opportunities in structural decadal shifts in manufacturing and tech evolution.

Carnelian employs a Concentrated QGARP portfolio – Quality Growth companies (Business & Management) at a Reasonable Price. The strategy aims to hold 20-25 stocks in the portfolio.

Investment Framework

  • Investing in good businesses: with traits such as profitable, robust cost leadership, opportunity and market size, free cash flow generation, the incremental return on capital, time test and easy to understand, and sustainable moat.
  • Great Management: evaluated based on integrity, modesty and capability, efficient capital allocation and a record of strong governance and risk management culture.
  • Favourable Risk Reward: upside potential with margin of safety (through business risk, balance sheet risk, and valuations)
  • Negative Screening: Avoid companies based on Aggressive accounting principles, High financial leverage, Low tax incidence, Management having misaligned objectives, Management with poor governance record and/or Management in hurry to create value.

Forensic Analysis based on CLEAR Framework

Carnelian’s forensic analysis involves a 2 step approach:

  1. Carnelian forensic check: An automated template screening last 10 years of historical data, highlighting potential minesweepers, which get rejected at this stage 
  2. Forensic deep dive:  CLEAR Framework  Their forensic team will deeply analyse the annual reports % financials which will be presented in a prescribed format to the investment committee. 

Trailing Performance

1yr 3yr 5yr Since Inception
Carnelian Shift 54.6 31.6 47.6
S&P BSE 500 TRI 41.1 18.4 27.8
Alpha over Broad Mkt BM 13.5 13.2 19.8
Nifty Midcap 150 47.4 25.2
Alpha over Category BM 7.2 6.4

Performance as of: 30-Sep-24 | Inception Date: 06-Oct-20

Fund Managers

Manoj Bahety | 3-star rated FM

Co-Founder | 27 yrs Experience | 6 yrs at current firm

Past Experience: Managing Partner (Omniscient Capital Advisors), Deputy Head Research (Edelweiss Securities), Sr. Manager (Morgan Stanley), Manager (Reliance Industries)

Manoj Bahety is a CA and CFA Charter holder with 20 years of rich and diverse financial services with marquee institutions. Manoj spent 11 years at Edelweiss Securities as Dy. Head – Institutional Equity Research, Head – forensic, thematic & mid-cap research. He is known for his “Analysis Beyond Consensus” forensic research approach which helped in avoiding pitfalls and identifying several multi-bagger ideas.

Vikas Khemani | 3-star rated FM

Co-Founder | 29 yrs Experience | 7 yrs at current firm

Past Experience: President (Edelweiss Capital), AVP (ICICI Securities)

Vikas Khemani has over 2 decades of experience of which he spent 17 years incubating and building several businesses to leadership positions including Institutional Equities and Equity Research as a CEO at Edelweiss Securities. He is associated with several industry bodies and committees including the CII National Council on Corporate Governance, FICCI Capital Markets Committee, Executive Council of Bombay Management Association. Vikas Khemani comes with strong business acumen and a deep understanding of the capital markets along with strong relationships with Corporate India.

Fee Structure

Fee StructureFee
Fixed Fee Structure2.25
Variable Fee Structures1.5% fixed+ 15% above 8%
Exit Fees

AMC

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

Upcoming AMC with a strong founding team: Carnelian has an impressive founding team from ex-senior investment team members of Edelweiss Securities - Vikas Khemani was the ex-CEO & largely responsible for building and scaling the business, while Manoj was the head of research. While neither of them have a public fund management track record, they come with strong research & investment business-building pedigrees). The investment philosophy & processes are well defined, and performance has been strong. Overall, we see Carnelian as a strong upcoming young firm in the Indian alternatives space.

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

4 of 5 stars

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