Equitree Emerging Opportunities
Our view on the fund, the AMC, the strategy, the performance & the investment team.
IME's Review of Equitree Emerging Opportunities
| Fund Rating | Strategy Rating | Performance Rating |
|---|---|---|
Upgrade | Upgrade | Upgrade |
View on the Fund
Equitree can be considered for investors with high risk appetite. However, we note that their strategy has witnessed very sharp drawdowns (esp during the early days when market sentiment was negative for small-caps). We would like to highlight our discomfort with the AMC's attempts to downplay the initial sharp drawdowns - (focusing on performance post CY20 & trying to use IRR as compared to SEBI-mandate TWRRs). The combination of our concern on selective disclosures & potential high volatility in future drawdowns prevents us from having a stronger more constructive view on the fund).
Strategy
Fund's Strategy View
The investment philosophy is driven by investing in companies that meet a certain set of criteria including easy-to-understand business models, strong growth potential, a strong or improving BS, management quality and reasonable valuations. The aim is to be long-term investors in identified companies. Risk control measures include a 10% limit on individual companies, a 25% sectoral limit and limiting shareholding to below 5% of a company's equity.
Fund Performance
The fund has outperformed peers & is amongst the top 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.
Trailing Performance
| 1yr | 3yr | 5yr | Since Inception | |
|---|---|---|---|---|
| Equitree Emerging Opportunities | -13.5 | 31.6 | 30.8 | 6.5 |
| S&P BSE 500 | 6.5 | 15 | 15 | 13.8 |
| Alpha over Broad Mkt BM | -20 | 16.6 | 15.8 | -7.3 |
| Nifty Smallcap 250 | -0.6 | 19.4 | 20.6 | |
| Alpha over Category BM | -12.9 | 12.2 | 10.2 |
Performance as of: 31-Jan-26 | Inception Date: 28-Jul-17 | Performance are post-fees, pre-taxes. Global funds denominated in USD or fund currency.
Investment team
Pawan Bharaddia | 4-star rated FM
Fund Manager | 27 yrs Experience | 14 yrs at current firm
Past Experience: Director (Nine Rivers), Axis Holdings, Frontline Ventures, Chase Manhattan Bank, ABN Amro
Mr. Pawan Bharadia: Pawan is the driving force of the company and spearheads all investments at Equitree. He has been an astute investor with over 20 years of successful investing experience across private & public markets. His calm and patient demeanor with a dogged attitude to detailing profoundly assists in identifying niche investment opportunities early on and taking long term bets. Prior to co-founding Equitree, he has held senior positions in private equity firms like Nine Rivers Capital, Axis Holdings & Frontline Ventures. In early part of his career, he has also worked with global organizations like Chase Manhattan Bank and ABN Amro Bank. Pawan is a qualified Chartered Accountant and a Bachelor of Commerce from Mumbai University and is based in Mumba
IME's Review of Equitree PMS
| AMC Rating | Pedigree Rating | Team Rating | Philosophy Rating |
|---|---|---|---|
Upgrade | Upgrade | Upgrade | Upgrade |
View on AMC
Equitree’s founding team comes with good credentials within the small-cap space. However, we note that their small-cap portfolio has experienced high volatility in the initial years, accordingly investors with a higher risk appetite can consider the PMS. A longer track record through different market cycles would provide additional confidence, but the current execution shows promise.
AMC's Pedigree
Equitree PMS, a new AMC, has experienced significant drawdowns in its early years, leading to investor concerns about volatility. It may take time for investor confidence to recover.
AMC Team
Equitree was founded by Pawan Bharaddia, Sudhir Bharadia, and Ssuneet Kabra, who have a combined 40 years of financial services experience. Pawan has a strong background in private equity and experience in listed equities at Nine Rivers.
Investment Philosophy
The investment philosophy focuses on companies with simple business models, strong growth potential, solid balance sheets, quality management, and reasonable valuations. The goal is long-term investment in selected companies, with risk control measures such as a 10% cap on individual investments, a 25% cap on sector exposure, and a maximum ownership of 5% in a company.
AMC Background
Equitree PMS established as a boutique firm specialising in small and micro-cap investing. The firm is positioned as a “private equity approach to public markets,” reflecting its intent to apply PE-style discipline, patience, and depth of research within the listed equity universe.
The firm is co-founded by Pawan Bharaddia, Chartered Accountant and Chief Investment Officer, and Ssusneet Kabra, Chartered Accountant and Chief Executive Officer. Pawan Bharaddia brings over two decades of experience across private equity and public markets, including senior roles with global banks and PE platforms, and has developed a track record of identifying early-stage opportunities in India’s small and micro-cap space. Susneet Kabra complements this with a background in entrepreneurship, financial advisory, and investor relationships, providing balance between investment execution and institutional development. Since inception, Equitree has consciously remained a boutique, prioritising investment performance, process integrity, and scalability discipline over rapid asset accumulation.
Investment Philosophy
Equitree’s investment philosophy is centred on identifying and owning high-quality emerging businesses at an early stage of their growth trajectory, where valuation inefficiencies are pronounced and long-term compounding potential is underappreciated. The firm seeks to combine deep value investing with high-growth outcomes by focusing on companies that can deliver 25–30% earnings growth over extended periods, while being available at valuations that provide a meaningful margin of safety. Investing is approached with a buy-and-hold mindset, typically with a three- to five-year horizon, allowing both business fundamentals and valuation re-rating to play out.
The philosophy explicitly borrows from private equity principles - early identification, deep due diligence, high conviction, and negligible churn—while retaining the liquidity advantages of public markets. Equitree believes that superior outcomes in small-cap investing come not from timing markets, but from disciplined accumulation of quality businesses during periods of volatility, followed by patient ownership through cycles.
Strategic Business Focus
Equitree invests only in businesses it understands deeply, with a strong emphasis on strategic clarity, scalability, and capacity for sustained earnings growth. Preference is given to companies that are leaders or emerging leaders within niche segments, possess clear competitive advantages, and operate in industries with structural tailwinds. Valuation discipline is a central pillar of the philosophy, with investments typically made at discounts to historical valuation bands or intrinsic value estimates, and with explicit focus on downside protection rather than optimistic forward projections.
Management Quality and Governance Emphasis
Management quality is treated as a non-negotiable variable in Equitree’s framework. The firm prefers family-run or promoter-led businesses with long operating histories, strong capital allocation discipline, and demonstrated integrity. Regular management interaction, ongoing governance monitoring, and forensic checks are integral to the investment process. Equitree believes that long-term compounding in small caps is inseparable from management behaviour, particularly during periods of stress or rapid growth.
Portfolio Construction
Portfolio construction is intentionally concentrated, typically comprising 12–15 stocks, with position sizes reflecting conviction and risk assessment. Initial positions are built gradually, often starting at 2–3% and scaled up as business execution and valuation comfort improve. The firm maintains an active watchlist and is willing to hold cash when valuations are unattractive, viewing cash as a strategic asset rather than a drag.
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