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SageOne Small Cap

Scheme Rating

IME Scheme Rating

3 of 5 stars

Recommened only for Very Aggressive Investors: 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.

IME Strategy Rating

3 of 5 stars

Concentrated Small & Microcap Strategy: 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).

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 SageOne Small Cap

Type: Small Cap | GARP | AUM (1091.5 cr) | Inc Date (01 Apr 2019)

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 44.3 25.6 29.7
S&P BSE 500 TRI 39.5 19.5 17.5
Alpha over Broad Mkt BM 4.8 6.1 12.2
Nifty Smallcap 250 67.7 29.7
Alpha over Category BM -23.4 -4.1

Performance as of: 28-Feb-23 | Inception Date: 01-Apr-19

Fund Managers

Samit Vartak | 4-star rated FM

Founder & CIO | 25 yrs Experience | 12 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).

Fee Structure

Fee StructureFee
Fixed Fee Structure2.5
Variable Fee Structures1% fixed + 15% above 8% hurdle
Exit Fees1yr(1%)

AMC

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

Highly recommended for aggressive investors looking for significant value creation opportunities: SageOne has a clear investment philosophy that focuses on investing in fast growth & high-quality businesses for the long run. Their CIO Samit Vartak has developed his investment credentials at SageOne, and with close to a decade's track record he may now be considered a seasoned investor. Supported by a strong research team and a strong philosophy, SageOne PMS is a good AMC for investors seeking mid & small-cap exposures.

AMC Rating

4 of 5 stars

AMC Pedigree

4 of 5 stars

AMC Size

4 of 5 stars

Team Pedigree

4 of 5 stars

Inv Philosophy

5 of 5 stars

Performance

4 of 5 stars

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Note: PMS AMC & Scheme Reviews and Ratings are based on IME Capital’s Proprietary Review and Rating Methodology (read more here: AMC Rating & Scheme Ratings). These reflect the unbiased views of our central research team, based on our assessment of the investment value of these PMS/AIF strategies for our investors. We follow a highly stringent rating-criteria, where approximately 50% of PMS AMC’s & strategies would be rated 2-star or below (this is not meant to indicate that these funds are not investment-worthy, but that they do not currently fulfill the requirements we focus on for recommending funds to our investors — based on our internal views on the merit of the AMC/strategy relative to peers). Reviews & Ratings are primarily based on research of publicly available information (SEBI disclosures, PMS websites, PMS-aggregation platforms, webinar recording, media interviews etc.) and no explicit consent is required from AMCs for the same. While we endeavour to do further due-diligence via direct interactions with the investment teams of AMCs, this is typically restricted to AMC’s that meet our foundational fund selection criteria (reviews on lower-rated AMCs are often based solely on publicly available information). The views reflected in our Reviews & Ratings, are our independent views and may not be shared by the AMC’s and the investment teams. Please read detailed disclaimer for more.