SageOne Small Cap
SageOne PMS | Equity | | PMSIME's View on SageOne Small Cap
Strategy
Investment Fund
SageOne Small & Micro-cap run a substantially higher risk portfolio, even compared to other small-cap strategies. While this has the potential to deliver strong outperformance, this comes accompanied by the potential risk of large capital losses. We would recommend this primarily for more aggressive investors. Performance has been muted over the past few years.
Fund's Strategy View
Having already established the mid and small-cap execution credibility through the Core portfolio, this strategy goes down the market cap curve into the micro-cap territory. If execution continues well, this is a very good strategy for investors looking for small and micro-cap exposure. The market cap focus of 500 - 5000 cr is well below the market cap that most institutional fund managers focus on. Small & Micro-caps as a space are inherently volatile (especially micro-caps, where volatility can be substantially higher than even small-caps, which is where most FMs stay away from this space). Adding concentration in this segment increases the risk further. Investors should expect potential high volatility in this strategy (with periods of high outperformance & also high potential underperformance).
Fund Performance
The fund has underperformed peers & is amongst the worst performing schemes in this category in the last 5 year trailing returns.
IME's View on SageOne PMS
View on AMC
SageOne focuses on investing in fast-growing, high-quality businesses for the long term. CIO Samit Vartak has developed his investment credentials at SageOne and has almost a decade of experience, making him a seasoned investor. With a strong research team and investment philosophy, SageOne PMS is a good option for investors looking for mid and small-cap exposure.
AMC's Pedigree
The pedigree of an FM-founded PMS, such as SageOne, is driven by the FM and their team. SageOne is led by Samit Vartak, who has a decade of experience in private equity and corporate strategy.
AMC Team
Samit Vartak has a solid investment background and is backed by a research analyst team with adequate experience. However, there has been senior-level turnover at SageOne, with co-founders Manish and Kuntal leaving in 2016.
Investment Philosophy
Investment philosophy focuses on building high-conviction portfolios of high-quality businesses with strong fundamentals and sustainable competitive advantages. They seek companies demonstrating superior growth (often targeting 20%+ compounded earnings growth) led by clean and competent management.
Investment Philosophy
The aim is to invest in high-conviction growth businesses that have a sustainable competitive advantage and are run by clean and competent management at reasonable valuations. The focus is on investing in superior businesses, and SageOne will not invest in a weak business irrespective of how attractive the valuations may appear.Investment Philosophy Built On
- Superior Growth: minimum 20% compounded earnings growth at individual level and 25% at portfolio level
- Market Share Gains: to contribute to incremental growth in earnings
- Profitability: strong and profitable businesses with >20% ROEs to fund growth internally
- Capital Allocation: incremental ROE higher than existing ROEs
- Efficient Moat: most efficient players industries (leaders or expected leaders due to superior strategy and positioning)
- Reasonable Valuation: SageOne will not invest in a weak business irrespective of how attractive the valuations may appear.
RISK MANAGEMENT
- Prudent Stock Selection: driven by financial and business analysis, internal forensic model to eliminate questionable business practices and management, and portfolio construction to minimise non-systemic risk
- Sectoral and Stock Limits: Maximum 25% exposure to a sector and maximum 20% exposure to any business group
- Timely Rebalancing: Active calls on liquidity based on external risk factors (macro, market volatility and valuations)
- Active Monitoring and Action: Strong network across industries for channel checks. Active entry/exit on changing business dynamics.
Trailing Performance
| 1yr | 3yr | 5yr | Since Inception | |
|---|---|---|---|---|
| SageOne Small Cap | -10.8 | 12.1 | 22.5 | 22.7 |
| S&P BSE 500 | -6.6 | 14.7 | 19.2 | 15.4 |
| Alpha over Broad Mkt BM | -4.2 | -2.6 | 3.3 | 7.3 |
| Nifty Smallcap 250 | -9.3 | 21.5 | 27.2 | |
| Alpha over Category BM | -1.5 | -9.4 | -4.7 |
Performance as of: 30-Sep-25 | Inception Date: 01-Apr-19 | Performance are post-fees, pre-taxes. Global funds denominated in USD or fund currency.
Investment team
Samit Vartak | 4-star rated FM
Founder & CIO | 27 yrs Experience | 14 yrs at current firm
Past Experience: Axis PE (VP), Ernst & Young (Associate Director)
Samit is the Founding Partner & CIO of SageOne. He has experience in Private Equity (at Axis PE Fund) and Corporate Strategy, Investment Banking and Business Valuations in the US (at E&Y and Deloitte).
