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Centrum Microcap

Scheme Rating

IME Scheme Rating

The Scheme does not meet our selection criteria at this time

Can be considered by very high-risk appetite investors: Who are seeking outsized returns and are willing to handle a very high level of volatility

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

Type: Small Cap | GARP | AUM (12 cr) | Inc Date (8 Jul 2016)

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 44.3 29.9 26.7 18.2
S&P BSE 500 TRI 39.5 19.5 19 16.2
Alpha over Broad Mkt BM 4.8 10.4 7.7 2
Nifty Smallcap 250 67.7 29.7 25.2
Alpha over Category BM -23.4 0.2 1.5

Performance as of: 28-Feb-23 | Inception Date: 08-Jul-16

Fund Managers

Abhishek Anand | 3-star rated FM

Fund Manager | 20 yrs Experience | 10 yrs at current firm

Past Experience: Centrum Wealth Management, Centrum Broking, SBI Capital Markets, Dun & Bradstreet, CMIE

Abhishek Anand has 10 years of experience with 8 years in institutional equity research covering sectors such as Telecom, Media, IT & Consumer. He has won the Starmine Top Analyst Award for 2011-12 and 2012-13 by Thomson Reuters. His previous assignments were with the institutional research division of SBI Capital Markets, Dun & Bradstreet, and CMIE.

Anil Sarin | 4-star rated FM

CIO | 6 yrs at current firm

Past Experience: CIO – Equity (Global Asset Management), MD India (Bessemer Venture Partners), Co-Head Equity (ICICI Pru AMC), Fund Manager (Birla IT Fund)

Anil Sarin, CIO, comes with 25+ years of experience in fund management. Anil Sarin was a Fund Manager for Birla IT Fund during 2001-03. Post that stint, he joined ICICI Pru AMC, where he became Co-Head of Equities and has managed many Equity Funds. He later went on to join Bessemer Venture Partners to become the Managing Director of India Operations. Prior to joining Centrum in his current role, he was designated as CIO – Equity for Global Asset Management at Edelweiss. Anil Sarin holds an MBA from the Institute of Management and Technology, Ghaziabad.

Fee Structure

Fee StructureFee
Fixed Fee Structure2.25
Variable Fee Structures1.5% + 25% above 10% hurdle rate
Exit Fees1yr(1%)

AMC

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

Can be considered for investment: Centrum PMS has developed strong credentials in the small & mid-cap space. A key concern is churn at the CIO level (both Kunj Bansal & Anil Sarin, past senior CIO's having left the firm), keeping a high level of dependence on Abhishek Anand (a relatively more junior fund manager but who has been with the firm for a long-time).

AMC Rating

3 of 5 stars

AMC Pedigree

3 of 5 stars

AMC Size

3 of 5 stars

Team Pedigree

2 of 5 stars

Inv Philosophy

4 of 5 stars

Performance

4 of 5 stars

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