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Nine Rivers Aurum Small Cap Opportunities

Scheme Rating

IME Scheme Rating

5 of 5 stars

Strong Investment Option for Small-caps: We like the firm’s focus on small-cap investing, with the additional advantage of the investment rigour of a private equity approach. The strategy has also demonstrated the ability to deliver longer-term outperformance.

IME Strategy Rating

5 of 5 stars

Private Equity Approach to Small-Cap Investing: Backed by the Private Equity credentials of the founding team, Nine Rivers Aurum Small Cap Opportunities follows a private equity style approach to listed small-cap investing (private equity thought process, buy-and-hold investment approach, more detailed & rigorous investment research process).It aims to invest in a concentrated portfolio (12-15 high conviction ideas) of small-cap stocks (market cap of less than 5000 cr). Stocks are invested with a 3-5 year investment horizon, with clearly defined risk-control limits at the time of portfolio construction (10% max stock weight, 25% max sector weight). Nine Rivers do not follow a model-portfolio approach, instead choosing to invest in what are the best investment ideas at the time of investment.

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).

IME View on Nine Rivers Aurum Small Cap Opportunities

Type: Small Cap | GARP | AUM (594.7 cr) | Inc Date (20 Dec 2012)

Investment Philosophy

Nine River Capital PMS’s Aurum Small Cap Opportunities fund aims to invest in a concentrated portfolio (12-15 high conviction ideas) of small-cap stocks (mkt cap of less than 3500 cr). The portfolio also has a unique product structure with a fixed term of 5 years, and the endeavour is to monetize the portfolio by the end of the tenure in a systematic fashion.

Nine Rivers Capital PMS’s core belief is that you can only generate superior long-term returns in small & mid caps by applying the same rigor and discipline as in private equity investing. The aim is to exploit the judgmental biases and behavioural weaknesses of market participants, to identify attractive investment opportunities. Nine Rivers looks for the following attributes in possible investee companies – dominance in a niche vertical, growth tailwinds, a robust balance sheet, strong ROEs and a lack of institutional research coverage.

INVESTMENT PROCESS

  • Ideation and Discovery: Spotting value-creation drivers through macro-tailwinds (policy, regulatory, consumer-behaviour, and technology among others)
  • Fundamental Evaluation: Strong 15% earnings growth with free cash flows, low leverage, good governance and sustainable 15%+ ROCEs
  • Conservative Entry Point: Buy growth at reasonable valuation. Average entry PE below 20x. 
  • Risk Management: Constant monitoring (of positions, performance, governance and macro), pro-active exits (based on valuation guardrails, thesis deviation, macro events, and superior alternatives), and selective forensic diligence where indicated.

Trailing Performance

1yr 3yr 5yr Since Inception
Nine Rivers Aurum Small Cap Opportunities 64.9 33.8 29.5 29.5
S&P BSE 500 TRI 39.5 19.5 19 15.1
Alpha over Broad Mkt BM 25.4 14.3 10.5 14.4
Nifty Smallcap 250 67.7 29.7 25.2
Alpha over Category BM -2.8 4.1 4.3

Performance as of: 28-Feb-23 | Inception Date: 20-Dec-12

Fund Managers

Sandeep Daga | 5-star rated FM

Founder & CIO | 25 yrs Experience | 11 yrs at current firm

Past Experience: Director (Frontline Strategy), Head – B2B Investments (ICICI Venture)

Sandeep Daga has over 20 years of experience in Private Equity and Public Markets, and Corporate Finance. He is known for his focus on small and mid-caps.

Vivek Ganguly | 5-star rated FM

Portfolio Manager | 25 yrs Experience | 11 yrs at current firm

Past Experience: Principal (Global Environment Fund India Advisors Pvt Ltd), Fund Manager (Quantum AMC), Portfolio Manager (Transpek Finance Ltd & Kisan Ratilal Choksey Pvt Ltd)

Vivek Ganguly comes with over 20 years of experience in Indian public and private equity markets, with experience as a Principal at Global Environmental Fund and Fund Manager at Quantum AMC.

Fee Structure

Fee StructureFee
Fixed Fee Structure
Variable Fee Structures2% fixed + 20% above 10% hurdle (performance fee only charged on redemption or completion of 5 years from first investment date)
Exit Fees1yr (3%), 2yr (2%), 3yr (1%)

AMC

AMC: Nine Rivers PMS (click link for detailed AMC review)

Highly recommended for aggressive investors : Nine Rivers Capital PMS is a credible niche PMS provider with a focus on small-cap investing with a private equity approach. With a strong investments team, a clearly articulated & differentiated investment philosophy (Private Equity approach to listed small-cap investing) and a focussed approach to mid-and-small cap investing it is a recommended option for those seeking investment portfolios focused on smaller companies.

AMC Rating

5 of 5 stars

AMC Pedigree

5 of 5 stars

AMC Size

3 of 5 stars

Team Pedigree

5 of 5 stars

Inv Philosophy

5 of 5 stars

Performance

5 of 5 stars

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