ITI Long Short Equity AIF
Our view on the fund, the AMC, the strategy, the performance & the investment team.
IME's Review of ITI Long Short Equity AIF
| Fund Rating | Strategy Rating | Performance Rating |
|---|---|---|
Upgrade | Upgrade | Upgrade |
View on the Fund
With a greater ability to change exposures to net-long, ITI Long-Short Equity AIF is a good option for investors wanting to participate in the equity markets, while wanting downside protection. It is also a good fit for investors wanting to diversify their exposures from traditional long-only funds.
Strategy
Aggressive long-short strategy
Fund's Strategy View
Unlike absolute return strategies where net-long positions are kept within a tight band, ITI Long-short equity allows for a much higher degree of variance in the net-long exposures (ranging typically between 25-60%, but with an ability to go from -15% to 100%). This allows for a much greater ability for the fund to deliver longer-term outperformance, provided the fund manager's call on the markets/stocks goes right. This strategy may be considered to be a more aggressive form of a dynamic asset allocation hybrid fund.
Fund Performance
The funds aim to use shorts tactically to reduce portfolio volatility, downside protection during turbulent market conditions. Consistent ability to take such calls is key for low volatility returns over time.
Trailing Performance
| 1yr | 3yr | 5yr | Since Inception | |
|---|---|---|---|---|
| ITI Long Short Equity AIF |
Performance as of: 31-Jan-26 | Inception Date: 11-Apr-18 | Performance are post-fees, pre-taxes. Global funds denominated in USD or fund currency.
Investment team
Rajesh Bhatia | 4-star rated FM
MD & CIO | 21 yrs Experience | 9 yrs at current firm
Past Experience: CIO (Simto Investment Company), MD & CIO (ProAlpha Systematic Capital), MD & CIO (Heritage India Advisors), SVP and Head of PMS (Reliance Capital)
Rajesh Bhatia has 14 years of experience in alternative investments (Long-short). Prior to ITI Long Short, Rajesh had held the CIO position across different funds such as Simto Investments (a subsidiary of Tata Investments), Heritage India Advisors (Indian advisor to New York-based Heritage Capital, an Indian Long-short equity fund). He was also the SVP and Head of PMS at Reliance Capital at the beginning of his career. Rajesh Bhatia is a commerce graduate from HR College, and has also completed the CFA program conducted by the CFA Institute, USA.
IME's Review of ITI AIF
| AMC Rating | Pedigree Rating | Team Rating | Philosophy Rating |
|---|---|---|---|
Upgrade | Upgrade | Upgrade | Upgrade |
View on AMC
For investors seeking absolute return long-short strategies, ITI AIF is amongst the best investment options, given the experienced fund manager and better downside protection in the last two major market corrections (IL&FS and the Pandemic) compared to other long-short strategies.
AMC's Pedigree
ITI Group has diverse financial products under their umbrella. The offerings also include lending (micro-finance, SME, LAS, and Home amongst others), which could potentially be troubled due to the inherent nature of the business model. As a standalone entity, the ITI AIF is a relatively new AMC having been established only in 2018, and yet to build credentials in the larger ecosystem.
AMC Team
Rajesh Bhatia brings over 30 years of experience as a CIO across multiple funds, including the ITI Long Short Fund, with deep expertise in alternative strategies. The fund has performed well in its first three years, and his long-term alignment with the platform is supported through ESOP participation. However, ITI has faced senior-level churn in the past, including the departures of Rajesh Aynor and Siddhartha Bhotika
Investment Philosophy
A long-short strategy can provide attractive absolute returns across market conditions, with a low correlation to other asset classes, making them an attractive addition to the portfolio. However, this requires a unique skill set to execute well, and the ITI team has shown that they have the skills to execute the strategy albeit over a shorter period.
ITI Long-Short Equity AIF Investment Philosophy
Objective
- To outperform the Nifty index over a full equity market cycle, while protecting downside during equity market downturns along the way; thus lowering volatility of performance & lowering risks.
- Fund focus on long term capital appreciation.
Fund Approach
- Fundamental focus: primarily a stock-picking approach based on fundamentals (both on long & short side)
- Key Philosophies: Stock-picking (absolute return merit, no index-hugging) | Checklist approach (to filter opportunities)
- Dynamic allocations: increase exposures in undervalue/oversold markets | reduce exposures in overvalued/overbought markets
Dual Portfolio Approach
- Strategic Portfolio: aimed at capturing multi-year growth of attractive Indian franchises | invest in secularly growing, high-quality, well-managed Indian franchises
- Tactical Portfolio: aimed to manage risk exposures while navigating volatile Indian equity markets | dynamic allocations between long & short exposures
Typical Net-Exposure Ranges
- Bullish Markets: 80-90% net long (100-120% gross long, 20-30% gross short)
- Normal Markets: 40-60% net long (60-90% gross long, 20-30% gross short)
- Bearish Markets: 20% net long (50-60% gross long, 30-40% gross short)
AMC Background
ITI Group offers a bouquet of financial products. Its business verticals include Asset Financing, Asset Management, Institutional Broking and Investment Banking. Promoted by Mr. Sudhir Valia. Mr. Valia is a board member of Sun Pharma. AIF is a relatively new area for ITI. The fund (long-short) was commenced in 2018. Diverse Financial Services Group ITI Group has diverse financial products under their umbrella. The offerings also include lending (micro-finance, SME, LAS, and Home amongst others), which could potentially be troubled due to the inherent nature of the business model. As a standalone entity, the ITI AIF is a relatively new AMC having been established only in 2018, and yet to build credentials in the larger ecosystem. AIF Backed by Experienced Fund Manager Rajesh Bhatia comes with over 3 decades of experience, having been CIO at multiple funds before ITI Long Short Fund and experience in alternative strategies.Experience the benefits of working with a 'research-first' investments firm
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