Scheme Rating
IME Scheme Rating
The Scheme does not meet our selection criteria at this time
Senior Fund Management Team Churn: Given the recent exits of Abhishek Anand and Anil Sarin, we see limited merit to consider this strategy at this point in time. Past performance is no longer an indication of the new team’s pedigree and execution of strategy, we accordingly remain watchful.
IME Strategy Rating
Clearly Defined Investment Strategy in small-cap spaces: Centrum Microcap is a Micro-Cap focused strategies driven by Centrum’s EDGE investment framework and a portfolio construction approach that ensures equal exposures to growth, quality & value investment styles. The strategy aims to invest in companies that are substantially smaller than the traditional small-caps (for example, the median market cap of micro is 2500 cr and 4000 cr is the upper limit, compared to the 15000 cr median for their Good to Great strategy).
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 Centrum Microcap
Centrum Micro - Investment Strategy
Micro-cap focused strategy focused on identifying emerging themes, in companies with high corporate governance leading to outsized returns
Centrum Micro is a small-cap strategy that looks to identify emerging themes, higher standards of corporate governance, turnaround cases potential for outsized returns.
Investment Philosophy
Centrum PMS is driven by their proprietary framework developed over time — ‘EDGE’ Framework. The AMC uses the EDGE framework to identify leaders.
EDGE Framework
- Earnings Growth (E): driven by criteria such as minimum ~15% EBITDA growth and ~15% ROCE | High cash to EBITDA ratio (65% and above) | Low leverage (<2x)
- Deep Dive Research (D): driven by factors like size of the opportunity, competitive advantage, scalability and channel checks
- Governance (G): evaluated based on accounting quality, past capital allocation, past related party transactions and dividend policy
- Execution (E): past track record and promise vs delivery historically
The above-mentioned EDGE framework is used to identify leaders.
Leadership traits are defined as
- Market Share
- Promoter/Management Pedigree
- Operating Margins and Return Ratios
- Brand/Distribution Strength
- Business Growth and Pricing Power
- R&D and Technology Differentiators
Portfolio Construction Strategy
Centrum strategies classify and take positions in companies labelled as ‘Quality’, ‘Value’, and ‘Growth’.
- Quality: Companies with a strong leadership positions, known for their proven track record
- Value: counter cyclical, contrarian, special situation opportunities
- Growth: emerging but lesser-known companies with high growth potential and leadership traits
The AMC believes that this reduces risk and ensure participation during various phases of market cycles.
Trailing Performance
| 1yr | 3yr | 5yr | Since Inception | |
|---|---|---|---|---|
| Centrum Microcap | 40.4 | 29.5 | 35 | 20.6 |
| S&P BSE 500 TRI | 41.1 | 18.9 | 22.9 | 17.5 |
| Alpha over Broad Mkt BM | -0.7 | 10.6 | 12.1 | 3.1 |
| Nifty Smallcap 250 | 52.3 | 27.1 | 32.6 | |
| Alpha over Category BM | -11.9 | 2.4 | 2.4 |
Performance as of: 31-Aug-24 | Inception Date: 08-Jul-16
Fund Managers
Manish Jain | 3-star rated FM
CIO | 18 yrs Experience | 1 yrs at current firm
Past Experience: Analyst (Nomura, Lehman Bros, Enam, ICICI Sec, Motilal), FM (Ambit)
Manish Jain is the CIO of Centrum PMS. He has a strong research foundation, having worked as a research analyst at Nomura, Lehman Bros, Enam, ICICI Sec and Motilal. His core areas of research focus have been on the consumer & auto sectors.
Abul Fateh | 3-star rated FM
FM | 18 yrs Experience | 0 yrs at current firm
Past Experience: True Beacon (Head of Equities), Baroda BNP MF (FM), Parag Parikh (Analyst), DBS MF (Analyst), Baroda AMC (Analyst)
Abul Fateh has an experience of 18+ years in the Equity Market. He has stints with True Beacon (Head of Equities), Baroda BNP MF (FM), Parag Parikh (Analyst), DBS MF (Analyst), and Baroda AMC (Analyst).
Fee Structure
| Fee Structure | Fee |
|---|---|
| Fixed Fee Structure | 2.25 |
| Variable Fee Structures | 1.5% + 25% above 10% hurdle rate |
| Exit Fees | 1yr(1%) |
AMC
AMC: Centrum PMS (click link for detailed AMC review)
AMC in the midst of transition: While Centrum has done well historically in it's mid & small-cap strategies, this has been under a different investment team - Abhishek Anand was a continuing fund manager, under 2 different CIOs (Kunj Bansal & Anil Sarin). In 2023-24, both Abhishek & Sarin quit, and have been replaced by Manish Jain (CIO) & Atul Fateh (FM). While Manish & Atul do come with past fund management experience, it is not very clear how much the investment strategies, philosophies & proceess will change under the new investment team. Until the new Centrum team does not stabalise (we would wait until 2025), we do not actively recommended Centrum strategies - which explains it's lower 2-star rating.
Centrum PMS does not meet our criteria for PMS AMC Selection at this time. Understand our AMC rating criteria at AMC Rating Criteria or contact us via the LiveChat to learn more.
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.