Equirus Long Horizon
Equirus PMS | Equity | | PMSIME's View on Equirus Long Horizon
Strategy
Investment Fund
A combination of an AMC with a clear small-cap focus, a small-cap specialist fund manager and a strong track record, makes Equirus Long-Horizon fund a good option for those seeking small-cap PMS exposures. However, it is important to note that Viraj Mehta the FM since inception of the fund has left Equirus in 2024, and is replaced by Sahil Shah (who also comes in with strong small-cap investing pedigree). Given Sahil's own strong small-cap investing track record & Equirus's strengths in this space, we continue to recommend Equirus Long Horizon but would watch keenly for any changes in performance & the investment strategy followed.
Fund's Strategy View
It invest in superior big-potential businesses at reasonable valuations(below their intrinsic value) with a view a long-term view of 3-5 years. They are intent to be early in the business discovery, thus providing maximum earnings growth with limited churn.
Fund Performance
The fund has underperformed peers & is amongst the worst performing schemes in this category in the last 5 year trailing returns. In terms of longer-term annual performance, performance has been consistent, with the fund having outperformed it's benchmark in over 60% of annual calendar 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
Equiris Long Horizon Fund is a small-cap strategy. Invest in superior businesses with a view of 3-5 years. The strategy intends to be early in the business discovery, thus providing maximum earnings growth with limited churn.
Equirus PMS follows a blended approach of investing in quality & value. The aim is to invest in relatively undiscovered businesses with long-term growth potential that are available at a price below their intrinsic value. The philosophy is essentially GARP (Growth at Right Price).
Investment Framework
- Growth: Earnings driven by sales and margin expansion
- Financial Strength: no or low debt, and deleveraging situations with higher coverage ratios
- Profitability: High ROCEs driven by improving margins and/or asset turns
- Management: High integrity with skin in the game and prudent capital allocation
- Attractive Valuation: low analyst coverage/institutional holding and market ignoring long term potential
Portfolio Construction
- Undiscovered Companies: Focuses on high-quality companies that are under-researched and under-owned with a bias for small and mid-cap companies at a reasonable valuation.
- Non-model portfolio approach: Does not follow model portfolio.
- Long-term outlook: Aims to buy businesses for atleast 3-5 years.
- Concentrated bets: Aims to hold 15-17 companies with a maximum of 10% in a single stock and 30% in a sector on the cost basis.
Trailing Performance
| 1yr | 3yr | 5yr | Since Inception | |
|---|---|---|---|---|
| Equirus Long Horizon | -14.5 | 14.3 | 21.7 | 20.2 |
| S&P BSE 500 | -6.6 | 14.7 | 19.2 | 14.5 |
| Alpha over Broad Mkt BM | -7.9 | -0.4 | 2.5 | 5.7 |
| Nifty Smallcap 250 | -9.3 | 21.5 | 27.2 | |
| Alpha over Category BM | -5.2 | -7.2 | -5.5 |
Performance as of: 30-Sep-25 | Inception Date: 20-Oct-16 | 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.
