Equirus Core Equity
Equirus PMS | Equity | | PMSIME's View on Equirus Core Equity
Strategy
Investment Fund
Equirus has been one of the best-performing small-cap specialists in India. Equirus Core Equity is a new strategy that is outside of Equirus' historical preference towards small-cap. We would wait for the strategy to age before recommending the same.
Fund's Strategy View
The investment objective is to generate capital appreciation predominantly through investments in equities across market capitalization curve with a long-term perspective.
Fund Performance
We refrain from evaluating the fund since it is yet to mature (less than 5 years).
IME's View on Equirus PMS
View on AMC
Equirus PMS has had a strong performance since its 2016 launch, focusing on small-caps which aligns with the group's strengths. Despite recent turnover in the investment team, the new CIO Sahil brings a strong track-record in small-caps. Equirus has the potential to build a successful niche PMS business with a small-cap focus.
AMC's Pedigree
Equirus PMS, founded in 2016, is part of the fast-growing financial business of the Equirus group. They have established niches in other businesses and are becoming known for strong performance in small-cap investments, making them a strong AMC for investors seeking specialists in this area.
AMC Team
In 2024, Equirus experienced a significant change in their investments team as Viraj Mehta left and was replaced by Sahil Shah, who previously worked at Edelweiss MF as a small-cap FM. It is important to monitor how this transition impacts the investment approach and performance. The founder Ajay Garg is more directly involved in the InnovateX AIF, as compared to the PMS funds.
Investment Philosophy
Equirus PMS focuses on buying growth at the right price (GARP) and specializes in investing in smaller companies, aligning with their broking expertise and CIO Sahil Shah's core skill sets.
Investment Philosophy
Equirus Core Equity is a concentrated multi-cap strategy. This strategy is seeking businesses with a market cap of 10,000-40,000 Cr. The strategy follows a non-model portfolio approach. Focus on multi-cap driven by certain large-cap characteristics such as size (market leadership), diversification (diversified revenue streams), survivability (better access to capital) and tech/human capital (ability to attract talent and invest in tech). Equirus Core equity focuses on investing in businesses that have a large headroom for growth and have a competitive advantage which requires little capital to grow to utilise a mix of top-down and bottom-up approaches:- Profitable: high ROCE and ROE | less capital-intensive growth
- Growth: large opportunity size and runway for growth
- Longevity: sustainable competitive advantage over the medium to long term
- Reasonable Price: available at a reasonable price defined by a reasonable margin between market price and intrinsic value, and should be able to have high cash generation
Investment Strategy
- Core Longs (80%): High-quality companies, high-conviction long-term positions, low turnover | 2-5 year horizon
- Tactical Plays (10%): Lower quality usually when compared to Core Longs, enhanced price discipline
- Opportunistic (10%): Special situations, price undervalued/oversold opportunities, undiscovered/low-coverage opportunities
EXIT STRATEGY
- Partial Selling: when fundamentals start to deteriorate | weightage is high
- Complete Exit: investment thesis might not play out | argument changes due to changes in environmental or company-related factors
PREFERENCE
Equirus Core Equity looks for companies that require less capital to grow and have a large room for growth and a durable competitive advantage with a tilt towards promoter-run companies, disruptors or beneficiaries of disruption and businesses seeing positive changes.AVOID
PSU except in a few cases, companies susceptible to large-scale disruptions and companies with poor governance.Investment Process
- Step 1 Universe: Listed Indian equity space with businesses that offer high growth, existing or potential market leadership driven by competitive advantage, proven management, track record, turnaround cases, corporate action, and under-ownership.
- Step 2 Screening, Research & Analysis: Screening for businesses with superior/improving future profitability at reasonable valuations and strong BS.
- Step 3 Formulation of Investment Rationale: Evaluate stocks based on 3yr CAGR potential.
- Step 4 Accepting ideas from 25-50 Stocks: Accepting stock ideas and inclusion in portfolios and continually monitoring investment thesis and weightage.
- Step 5 Selection of 20-25 Stocks
Trailing Performance
| 1yr | 3yr | 5yr | Since Inception | |
|---|---|---|---|---|
| Equirus Core Equity | -9.1 | 11.6 | 13.2 | |
| S&P BSE 500 | -6.6 | 14.7 | 17.3 | |
| Alpha over Broad Mkt BM | -2.5 | -3.1 | -4.1 |
Performance as of: 30-Sep-25 | Inception Date: 27-May-22 | Performance are post-fees, pre-taxes. Global funds denominated in USD or fund currency.
Investment team
Ajay Garg | 4-star rated FM
Managing Director | 32 yrs Experience | 18 yrs at current firm
Past Experience: DSP Merill Lynch (VP), Mape Advisory Group (Co-Founder), Kwench (Director), CRIF India (Director)
Ajay Garg is the founder of Equirus Capital. He is a veteran investment banker, with over 22 years of experience in Investment Banking. He is acknowledged as being amongst the top dealmakers in the country. He started his career with DSP Merrill Lynch where he was involved with several landmark deals during his stint there between 1996–2002. Prior to setting up Equirus in 2007, he was the group CEO of a leading investment bank which he co-founded. Ajay holds a first degree in engineering and is a postgraduate in management from IIM, Ahmedabad.
Sahil Shah | 3-star rated FM
CIO | 19 yrs Experience | 1 yrs at current firm
Past Experience: Edelweiss Research (Analyst), Anagram Capital (Analyst)
Sahil Shah has over 17 years of extensive experience, he has worked as an analyst and managed mutual funds and PMS. Previously, he worked with Edelweiss Small Cap Fund (AUM 3300cr) as a fund manager and was also co-fund manager for Midcap and Multicap funds at Edelweiss. Prior to joining Edelweiss Asset Management, he has worked with Edelweiss Financial Services and Anagram Capital
Gaurav Arora | 2-star rated FM
Fund Manager | 15 yrs Experience | 4 yrs at current firm
Past Experience: VP (Avendus Capital), AVP (Kotak Institutional Equities), Assistant Manager (Tata Motors)
Gaurav Arora has 15+ years of experience in finance. Before joining Equirus, he worked at Avendus Wealth Management and Kotak Institutional Equities. He holds degrees from IIM Calcutta and BITS Pilani.
