Scheme Rating
IME Scheme Rating
Can Consider as an Investment Option: Soliadarity’s credibility is built on the FM’s strong Experience in PE.
IME Strategy Rating
Fair Strategy Adherence: Follows a multi-cap strategy of investing in businesses with growth and signs of business improvement (expanding moats, increasing market shares and strong ROEs). PMS approach of investing in compounding stories backed by clear fundamental parameters. FM’s experience in PE goes along with a strategy to follow the PE style.
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 Solidarity Prudence
Solidarity Prudence- Investment Strategy
Focus on Tailwinds of growth, expanding moat and increasing market share and ROE
Solidarity Prudence is a multi-cap strategy. Prefer to invest in companies with tailwinds of growth, expanding moat, and increasing market share and ROE.
Investment Philosophy
- Broadly Predictable Growth: Companies with large addressable markets, and structural industries tailwinds
- Improving Edge: Favourable industry structure, sector/niche leadership, competitive advantage and ability to deploy capital for growth at ROE >15%
- Disciplined Management: Focus on few business lines, disciplined capital allocation, prudent use of leverage and learning organisation.
Things that Solidarity does not do
- Don’t believe in model portfolios: model portfolios imply that current valuations do not matter, so the strategy invests in the best opportunities at present
- No cash calls based on macro events
Valuations
Sensitive to growth stage of the life cycle. With more mature business growth, the higher the need for valuation sensitivity.
Portfolio Construction
- Portfolio Allocation: 40-50% in ‘Clear Leaders’, 40-50% in ‘Emerging Leaders’, and ~10% in ‘Special Situations’.
- Clear Leaders (15-18% IRR Ask): Leaders in a growing market, with dominant share of the profit pool and robust business model & balance sheet.
- Emerging Leaders (18%+ IRR Ask): on path to becoming leaders, typically in a specific niche
- Special Situations (25% IRR Ask): good businesses undergoing temporary uncertainty with high price-value divergence.
- Concentration: 15-20 companies with minimum 3% position size
- Position sizing: may vary between 3-15%
- Risk Management: Avoid poor governance and excess leverage. Volatility is not risk.
- Sell: 1) euphoria in valuations and/or 2) new facts change the view
Themes that interest the team
- Opportunity to gain market share in global supply chains: Manufacturing/Services
- Private sector Banks who will gain market share
- Life Insurance: trusted brands, strong distribution
- General Insurance with preference for adoption of health insurance
- Digital Business Models and enablers of Digital
- Mitigation of inequality
- Discretionary consumption-“Affordable luxury”
- Financialisation of Savings
- Formalization of the economy
- Thrust on clean energy
Trailing Performance
1yr | 3yr | 5yr | Since Inception | |
---|---|---|---|---|
Solidarity Prudence | 23 | 8 | 21.3 | 18.8 |
S&P BSE 500 TRI | 41.1 | 18.4 | 22.4 | 18.2 |
Alpha over Broad Mkt BM | -18.1 | -10.4 | -1.1 | 0.6 |
Nifty 500 | 40.2 | 17.2 | 21 | |
Alpha over Category BM | -17.2 | -9.2 | 0.3 |
Performance as of: 30-Sep-24 | Inception Date: 11-May-16
Fund Managers
Manish Gupta | 4-star rated FM
Founder & CIO | 27 yrs Experience | 10 yrs at current firm
Past Experience: RARE Enterprises (MD-Private Equity), Honeywell (Director-Strategy), BCG (Strategy Consultant)
Prior to founding Solidarity in 2014, Manish worked with Rakesh Jhunjhunwala for 8 years as the Managing Director for Private Equity Investments at Rare Enterprises. His prior experience includes 7 years of strategy consulting with the Boston Consulting Group.
Fee Structure
Fee Structure | Fee |
---|---|
Fixed Fee Structure | 2 |
Variable Fee Structures | 1% fixed + 20% above 12% hurdle |
Exit Fees |
AMC
AMC: Solidarity PMS (click link for detailed AMC review)
Highly recommended for aggressive investors looking for Multi Cap strategies with PE Style Approach: Investing in Solidarity PMS is essentially investing with Manish Gupta and taking a call on his ability to leverage his substantial experience in corporate strategy & private equity to deliver outperformance while managing listed equities. The premise is interesting, but we would ideally like to wait a few more years to analyse performance across market cycles.
AMC Rating
AMC Pedigree
AMC Size
Team Pedigree
Inv Philosophy
Performance
Free 30-Day Trial of the IME RMS
Details shared above, are only a short-snapshot of the more detailed analysis that resides in IME’s Proprietary RMS (Research Management Solution).
The IME RMS is the first tool ever, to give investors direct access to the insights of the central research team. Investors gain direct access to our ratings, rating rationales & analysis across thousands of funds (MFs, PMSs, AIFs, Global funds), asset classes, categories & more.
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.