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).
- 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 | 4.3 | 14.9 | ||
| S&P BSE 500 | 8.4 | 19.3 | ||
| Alpha over Broad Mkt BM | -4.1 | -4.4 | ||
| S&P BSE 500 | 8.4 | |||
| Alpha over Category BM | -4.1 |
Performance as of: 31-Jan-25 | Inception Date: 27-May-22
Fund Managers
Sahil Shah | 3-star rated FM
CIO | 18 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 | 3 yrs at current firm
Past Experience: VP (Avendus Capital), AVP (Kotak Institutional Equities), Assistant Manager (Tata Motors)
Sahil Shah is the Chief Investment Officer (CIO) and Managing Director of Equirus AMC. He 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. He is a CFA and has completed his graduation (B.Com.) from Gujarat University (HLIC).
Ajay Garg | 5-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.
Fee Structure
| Fee Structure | Fee |
|---|---|
| Fixed Fee Structure | 2.5 |
| Variable Fee Structures | |
| Exit Fees | 1yr(2%), 2yr(1%) |
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