Mr Vikas Agrawal, hosted an exclusive webinar with Mr Sandeep Daga. Mr Vikas Agrawal is the founder and CEO of AIF & PMS Experts India. The webinar guest, Mr Sandeep Daga, is the MD & CIO of Nine Rivers Capital.
Mr Agrawal and Mr Sandeep Daga discussed a lot of interesting topics. Their investing methodology is a confluence of qualitative and quantitative research based on the core learnings from their private equity background. Each team member has adequate opportunity to do ”original” thinking while adhering to a prescribed discipline, resulting in superior performance outcomes.
About AIF & PMS Experts
We are a company that focuses on multi-asset Alternative Investments. Portfolio Management Services, Public Equity (listed and unlisted), Venture Capital, Private Debt Structured Products, and Real Estate Alternative Investments are some of our core services.
At AIF & PMS Experts, we have a mission of fostering long-term wealth creation for our clients by fostering confidence in governance, ensuring transparency, and facilitating long-term wealth growth. Our many products, analytics, and tools are essential to our business and help us achieve our goals.
Fund Manager Profile
Mr Sandeep Daga has more than 24 years of corporate finance and public / private equity investing expertise. Before starting Nine Rivers Capital, he was a Partner at Frontline Ventures, an India-focused private equity firm. Over five years, the PE fund advised by Frontline had top-quartile returns under his guidance.
Sandeep graduated from Amravati University with an Engineering degree in Electronics and an MBA in Finance from NMIMS. He began his venture capital / private equity investing career as Head, B2B Investments at ICICI Ventures. In his early career, Sandeep worked for a renowned NBFC and a business conglomerate, gaining experience in corporate finance.
We search for the following characteristics in potential investee companies:
- Being the most powerful player in a specific vertical.
- Policy tailwinds, shifting consumer dynamics, technology, and other factors have all helped.
- Robust balance sheets – they avoid flimsy balance sheets.
- The business generates/has the potential to generate high ROE / ROCE.
- Non / is under ”sell-side” analyst coverage.
Several Thongs That They Look for in Their Portfolio Companies
- Macro Tailwinds: Policy, Regulatory, Demographic, Tech-Driven.
- Solid business franchise – a leader in its space/innovation led/operating leverage.
- A Large Addressable Market that is perfectly oligopolistic for investing!
- Portfolio Growth – no mindless chasing of growth!
- Debt Aversion – debt is a bad world!
- Free Cash Generation potential & planned use of free cash.
- Paying Income Tax!
- High on “ESG” quotient – Respect environment, people and corporate governance.
- All of the above at ”Reasonable Valuation”.
Key Learnings from Their 9 Year Journey As A Small cap PMS
- Patience pays!
- The biggest MOAT for any company is its leadership and management team.
- Be humble. You don’t know a lot even though you think you do!
- Like money, knowledge also compounds over long periods.
- Reasonable valuation is a function of business quality and not absolute PE multiple.
- Business Fundamentals are often more important than macro economies and geopolitical developments.
- Listen to your guts!
Investment Themes for Current Times
- ”Revenge Consumption” – Apparel, Travel, Leisure, Entertainment.
- Global healthcare ecosystem up-gradation – multiyear growth opportunity for pharmaceuticals, medical devices, diagnostics and allied business.
- IP led Technology plays – Unparalleled boom in VC funding will lead to many global techs plays emerging from India.
- Atmanirbhar and China+1 play in the manufacturing sector, including Defense & Aerospace.
- Green World theme – green hydrogen, energy storage, E-R&D.
- Financials – Banks and NBFCs that are powering themselves with fintech.
- Post-COVID Structural Beneficiaries: F&B, E-Commerce Platforms, Logistics etc
- Investors should invest for at least five years.
- The whole money is not invested in the stocks or companies in a single day. Several parameters portfolios are there for investment methodology.
- India has many macro companies.
- Investors should not worry about the market but should be ready for anything.
- High volatility in large indices.
Market investment is critical, and an investor does that job carefully. It’s a tremendous chance to learn more invest philosophy, international effect on stocks, company portfolios, etc.