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Marcellus Rising Giants

AUM (188 cr) | Inc Date (27-Dec-2021)

Scheme Rating

IME Scheme Rating

3 of 5 stars

Marcellus Rising Giants is currently closed for subscriptions. We would anyways wait for performance to improve prior to recommedning this scheme.

IME Strategy Rating

4 of 5 stars

It a concentrated (20-30 stocks) mid-cap strategy is a high-risk-reward strategy, but also one that is clearly differentiated. Marcellus’s strong focus on clean accounting, corporate governance, capital allocation, and barriers to entry help mitigate many of the normal risks while investing in mid-caps, which makes this an interesting investment option for investors willing to take on a higher level of risk.

AMC Rating

3 of 5 stars

AMC: Marcellus PMS (click link for detailed AMC review)

Marcellus offers strong investment options for those interested in high quality companies, but their lack of flexibility in investment approach hinders performance across market conditions. Recent weak performance and limited portfolio repositioning capabilities contribute to lower ratings for the seasoned investment team.

PMS Scheme Ratings are driven by IME’s Proprietary Scheme Rating Methodology, which takes into account our ratings of the Scheme’s investment strategy, its maturity, the investment team, and our separate rating on the AMC that runs this particular scheme. Our views on each of these individual criteria are available via the IME RMS – which you can view by reaching out to one of our relationship managers (using either the live chat or book appointment feature on this site).

Investment Philosophy

Marcellus ‘Rising Giants’ is a mid-cap focussed concentrated strategy. The strategy defines mid-cap as typically less than INR 7500Cr market-capitalisation, predominantly in the INR 700 to 7500 range.

Key Aspects of the Philosophy

  • Clean accounting
  • Companies with a track record of superior capital allocation
  • Companies that pass both those filters, identify those with high barriers to entry

Investment Process

Rigorous process to filter out based on 1) forensic accounts, 2) sustainability parameters, 3) bottom-up research, channel checks, and management meetings to invest in 12-15 high-quality companies.

  • Forensic Accounting: Avoid companies with poor corporate governance. About 40% of the starting 500 company universe get eliminated here.
  • Sustainability Parameters: Using defined threshold on revenue growth, and ROCE. Identify cash-generating growing franchises. Around 50% get further eliminated at this step.
  • Bottom-up research: research on only 10% of the universe. Detailed analysis of secondary resources along with channel checks, independent views and management meetings.

Sell Framework

Sell decisions are based on 2 factors i.e lower than expected free cash flow growth and uncertainty around ‘longevity score’ due to a slowdown in growth, weakness in moat and legacy.

  • Free Cash Flow Growth: Weakening competitive positioning impacting slower growth
  • Moat Score: Weakening franchise’s strength visible in pricing power
  • Weakening Lethargy Score and Succession Planning

Trailing Performance

1yr 3yr 5yr Since Inception
Marcellus Rising Giants 14.9 1.8 -2.1
S&P BSE 500 4.8 12.3 13.3
Alpha over Broad Mkt BM 10.1 -10.5 -15.4
Nifty Midcap 150 7.6 19.8
Alpha over Category BM 7.3 -18

Performance as of: 31-Mar-25 | Inception Date: 27-Dec-21

Fund Managers

Rakshit Ranjan | 5-star rated FM

Fund Manager | 21 yrs Experience | 6 yrs at current firm

Past Experience: Ambit Capital (FM), Lloyds Banking (Director Research), Noble & Co (Analyst)

Rakshit has a strong investment management track record, having launched Ambit’s Coffee-Can PMS in Mar-17, which he ran till Dec-18. The Coffee-Can PMS was one of the best-performing PMS schemes in 2018. Prior to setting up the Coffee-Can PMS, Rakshit was the lead consumer analyst at Ambit. His earlier experience was in UK equities at the Lloyds & Noble groups.

Saurabh Mukherjea | 5-star rated FM

Founder & CIO | 27 yrs Experience | 7 yrs at current firm

Past Experience: Ambit Capital (CEO), Noble (Head of India Equities), Accenture (Consultant), London Economics (Consultant)

Saurabh comes with a very strong investments background, having helped build Ambit’s broking, wealth & investment management businesses as CEO. He was also responsible for building Execution Nobles India broking business (which was sold to Ambit) and having set up and sold Clear Capital (a UK based small cap research fund). Saurabh is a strong believer in investing in the long-term in very high quality clean businesses and has written a number of books including Gurus of Chaos, The Unusual Billionaires and Coffee Can Investing.

Fee Structure

Fee Structure Fee
Fixed Fee Structure 2.5
Variable Fee Structures 1.75 + 10% Above 6% + benchmark
Exit Fees Nil

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