Unifi Insider Shadow
Unifi PMS | Equity | | PMSIME's View on Unifi Insider Shadow
Strategy
Investment Fund
The fund is currently closed for subscription. In its place, we prefer Unifi Blended Rangoli, which offers a diversified mix of seven distinct themes - including the unique Insider Shadow strategy - providing both breadth and depth through Unifi’s proven thematic investing approach.
Fund's Strategy View
The strategy dynamically invests across market caps based on promoters' actions, especially when they buy shares or increase holdings. By closely tracking insider trading, the approach leverages insider knowledge to inform investment decisions. The goal is to capitalize on company insiders' insights and actions, aiming for enhanced portfolio performance.
Fund Performance
The fund has underperformed peers in the last 5yr trailing returns. In terms of longer-term annual performance, performance has been consistent, with the fund having outperformed it's benchmark in over 60% of annual calendar years.
IME's View on Unifi PMS
View on AMC
Unifi's unique thematic investment approach and experienced in-house team have positioned them as a leading player in the PMS market, allowing them to successfully deliver consistent results across various strategies and achieve significant growth.
AMC's Pedigree
Since its founding in 2001 by Sarath Reddy, Unifi has grown into a leading PMS player in India - impressively, without the backing of a big broker, AMC, or a star fund manager. It’s a testament to Reddy’s sharp entrepreneurial drive. Now, with the launch of its own mutual fund and GIFT City platforms, Unifi is taking further strides in institutionalising its business.
AMC Team
Unifi's investment team is made up of individuals with limited prior investment expertise, but they have developed strong in-house research capabilities and a consistent process. This stability has allowed them to create their own unique investment style, with Sarath Reddy playing the key role as CIO driving investment decisions.
Investment Philosophy
Unifi has traditionally focused on a thematic investment style, with the launching of specific thematic funds at different points in time (this includes funds like Event Arbitrage, Delisting, Insider Shadow, Sector Trends, Deep Value, Holdco, SpinOff, APJ 20 and BCAD). As the firm scaled, they have shifted their focus away for pure closed-ended thematic funds, towards an open-ended Rangoli strategy that encompasses stocks across the 7 major themes Unifi has invested in the past (making it now more comparable to a flexi-cap strategy, as compared to pure thematic investing).
Investment Philosophy
Unifi’s Insider Shadow strategy aims to invest in companies where the promoter has acquired additional shares that seem to be motivated either by an undervalued price or an impending improvement in business prospects. The rationale is that managers and controlling shareholders have a clear advantage over other market participants and are well-positioned to rake sensible investment decisions, especially in the case of small and under-tracked companies. Promoters typically use one or more of the following methods to increase their stake by:- Preferential issue of shares and/or warrants
- Merger of promoter owned private/public companies
- Creeping acquisition in open market
- Voluntary open offer
- Subscribing to unsubscribed public portion in rights issues
- Initiating the company to do a buyback either through market purchases or tender offer route
PMS Background
Founded by Sarath Reddy in 2001, Unifi has seen tremendous growth to enter the top 5 PMS providers in the market. What makes this accomplishment so credible, is that this is a PMS that has been built from the ground up (without the backing of a large broker, AMC or Star Fund Manager). Unifi’s success has been built on the back of strong client engagement and the launch of differentiated strategies based on specific market opportunities (typically close-ended limited-time launches) as compared to the more common open-ended evergreen strategies of other PMS providers. Unifi provides unique proposition to their clients Unifi has been very successful in consistently identifying thematic-based opportunities. The team at Unifi, led by Sarath Reddy, have built the AMC to become a leading fund house despite the lack of backing of any large institution, solely based on their differentiated proposition and value-addition to the clients.Investment Philosophy
Unifi is essentially a value investor in growth businesses. Value is placed first, but with a clear recognition that business growth is the critical catalyst required for a stock to re-rate. These niche opportunities are often limited in terms of time and the amount of capital that can be deployed, which is why most Unifi strategies are launched for only a limited time and are systematically closed once the opportunity has played out. The current niche themes that the fund follows are:- Spin-off: Corporate action leading to mispricing in a special situation
- Deep Value Discount (DVD): Deep discount to intrinsic value due to inadequate understanding of the business, relatively low market cap, and liquidity, or lack of correlation to benchmark indices. DVD invests in such businesses and exploits market inefficiencies
- Hold co: Identifies strong underlying businesses and looks for massive valuation discounts that are likely to recover as promoters feel the heat of change in the regulatory landscape
- APJ20: Sectors that become globally competitive and are privy to an expanding market opportunity. APJ20 theme selects firms that have evolved and are in a ripe position to benefit from such growth prospects.
- Green: Focus on companies that provide products and services that help in reducing the carbon footprint in the environment and/or result in more efficient use of natural resources. Sectors identified are – emission control, energy efficiency, water management, and waste management.
- Insider Shadow: Invests in companies in which founders have acquired a meaningful quantity of additional shares at market prices.
- BCAD: Focus is on established companies in the specific sector that are lading the migration of market share from unorganized to organized players. Powerful trends are driving the shift in the balance of competitive advantage in favour of organized businesses.
Thematic-based Strategies
Unifi follows a thematic investment style, with each strategy designed around specific niche opportunities. They pan across special situations, deep value, business consolidation due to disruption, green opportunity, insider shadow among others. These theme-based strategies could provide good risk-adjusted returns and be a good addition to the portfolio helping in diversification since they are typically ignored parts of the markets.
Suitable For
Investor's seeking to invest in specific investment themes.
Trailing Performance
| 1yr | 3yr | 5yr | Since Inception | |
|---|---|---|---|---|
| Unifi Insider Shadow | -7.2 | 9.2 | 15.8 | 14.4 |
| S&P BSE 500 | 4.9 | 14.6 | 17.2 | 13.2 |
| Alpha over Broad Mkt BM | -12.1 | -5.4 | -1.4 | 1.2 |
Performance as of: 30-Nov-25 | Inception Date: 31-May-10 | Performance are post-fees, pre-taxes. Global funds denominated in USD or fund currency.
Investment team
Sarath K Reddy | 5-star rated FM
CIO | 36 yrs Experience | 25 yrs at current firm
Past Experience: Navia Markets (MD), Stan C (Manager)
Having started his career with Standard Chartered Bank, Sarath founded Unifi Capital in 2001 and has since built the company into one of the leading PMS providers in India. As CIO, he works closely with his investment team to deliver outperformance on Unifi PMS strategies.
Baidik Sarkar | 4-star rated FM
Fund Manager | 19 yrs Experience | 18 yrs at current firm
Past Experience: Unifi (Corporate Finance), PWC (Strategy Consultant)
Baidik has been with Unifi for over a decade, with core responsibilities of research in the IT, real-estate and the agricultural sectors and assisting the CIO in managing the spin-off and APJ funds.
Saravanan V N | 4-star rated FM
Fund Manager | 26 yrs Experience | 19 yrs at current firm
Past Experience: Unifi (Corporate Finance), ICICI Bank (Credit Manager), PWC (Article Assistant)
Saravanan has been with Unifi for over a decade, with primary responsibilities of tracking pharmaceuticals, NBFC, and domestic debt markets. He has a specific specilisation in debt securities and identifying arbitrage opportunities.
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