ASK Indian Entrepreneur Portfolio

Invests mostly in businesses owned by promoters. The portfolio looks for high-quality companies with substantial growth potential and robust profit growth (without capital dilution). Strict commitment to an investing philosophy that is well defined, with an internal investment team that is strong and reliable. The research team produced a fund manager consistent with its investing philosophies. It has a track record of generating reliable returns for nearly 10 years. Being successful from the start. 

Leading private discretionary money management company ASK IM is registered as a portfolio manager and investment advisor with the Securities and Exchange Board of India, Mumbai, and is subject to its regulation. Through segregated accounts and commingled funds, ASK IM invests solely in listed Indian equities on behalf of clients with residences both in India and abroad. High net worth individuals (HNIS), organizations, pension funds, endowments, sovereign wealth funds (SWFs), family offices, and multi-managers are some of the clientele that the company now serves.
The two main tenets of ASK IM’s basic concept are capital preservation and capital ation. ASK IM looks to make investments in Indian stocks managed by high-quality management that have sustained long-term growth potential and trade at fair and reasonable pricing.

Investment Purpose IEF seeks to make long-term compounding investments in “Entrepreneur run enterprises” that are listed on Indian stock exchanges. IEF seeks to create better long-term wealth by investing in high-growth (listed) enterprises run by Indian entrepreneurs/families. IEF is a portfolio of high-growth, high-quality companies run by visionary and morally upright business owners who are skilled at distribution, capital allocation, and execution.

The following primary investing characteristics serve as the foundation for investments in ASK India Select Portfolio:

• Size of Opportunity: Size of Pond vs. Size of Fish, Dominance, Resilience, Liquidity
• Quality of Business: High quality of business (superior ROCE), Strong moat, Impregnability, Sustainability, Key pivot of strong wealth creation 
• Earnings Growth: Quantum, Consistency, Durability, Predating (early vs later), Compounding power
• Value: Favourable price-value gap, Margin of Safety
• Management Quality: Good management quality is a given constant

The investment process is driven by a progressive culling of businesses from a larger universe based on particular standards that ASK emphasizes:

• 500: Start with the top 500 as per market cap 
• 306: Companies with >25% promoter/family holding
• 210: Condition of minimum 100 Cr Trailing PBT
• 123: subjective assessment of, among other things, corporate governance norms, capital allocation, previous performance, and managerial quality
• 59: Robust filters with at least 25% ROCE (capital efficiency)
• 20: Finally, a strategy for investing that includes 20 companies and is predicated on 1) earnings growth of 20 to 25 percent over the following three to five years without capital dilution and 2) a margin of safety of 20 percent on intrinsic value

• More assurance of earnings vs a merely quantitative increase in earnings
• The superior and constant quality of earnings as opposed to a merely quantitative rise in earnings
• Superior quality at a fair price as opposed to subpar quality at an absurdly low cost

• Instead of valuing the price, price the value.
• Investing with discipline in excellent companies
• Assembling a portfolio of prospects for compounding
• Purchase “growing” companies for “value” pricing.

The strategy is to purchase high-quality companies at reasonable costs rather than buying subpar companies for a bargain.

• The Advantages of ASK PMS “Investing is simple but not easy,” says Buffett. It is the consistent and disciplined execution of simple items in all market environments that needs character, and it is this that makes all the vital difference.
• ASK Investment Managers’ central philosophy revolves around two main aspects:

1. Capital preservation comes first (over time)
2. followed by capital appreciation.

The core objective of ASK PMS is to build a concentrated portfolio of primarily mid-sized businesses with a proven track record, representing quality and superior long-term compounding potential.

• Concentrated investment approach of 20-25 carefully identified businesses across range of market capitalization.
• Focused portfolio of mid-sized businesses with a proven track record which could go on to become much larger thereby creating significant investment returns.
• Buying businesses with a large competitive advantage & capital efficiency in industries with a large size of opportunity that offer superior growth over long period of time.
• Largely complementary portfolio to IEP, India Select and Growth strategies.

• Identify large-scale and rapidly expanding business prospects.
• Identify significant-sized enterprises with a competitive advantage (minimum PBT of Rs.100 crore): Allows for both market share and opportunity size growth, and may be sustained for several years.
  To be able to support rapid development through internal cash flow, the quality of the firm must be good.
• Each firm we purchase should grow at least 20% compounded annually, and the portfolio should increase at least 25% annually.
• To support this expansion, the company’s return on capital employed (ROCE) should be more than 25%, with surpluses for dividends.
• Management should be motivated and have skin in the game in order to produce compounding growth year after year (uncompromised corporate governance is a must)
• As a result, with a minimum 25% share, invest in enterprises with a well-known business house at the leadership.
• We aim to find such firms at a modest discount to their intrinsic worth, stay invested for a long period, and profit as EPS compounds.

The risk is associated with the investing goal, investment strategy, and asset allocation. As opposed to debt, equities represent a higher level of risk. While risk cannot be completely removed, it may be reduced via the use of a well-planned investment strategy. Through research-based investment, ASK Investment Managers Portfolios attempt to limit risk and achieve higher returns. 

However, due to a variety of factors such as negative market movements, portfolio management misjudgment, bad political or economic events, and so on, this goal may not be fully realised. The PMS is run with the goal of regularly achieving respectable returns. Given this context, an investor in the PMS bears the following dangers:

• Political, economic and/or related risks

Changes in government policy, taxes, interest rates, social and religious instability, and other political, economic, or other developments in or affecting India may have an impact on the portfolio’s Asset Value and liquidity.

• Industry risk

Changes in government policy on tariffs, FDI, or a foreign nation that is a major market for the sector may impose import restrictions, among other things, might alter the value of a company’s stock.

• The Indian Securities Market

The Indian stock markets have seen significant price volatility in the past, and there is no guarantee that this would not happen again. The actual market trend may differ from the expected trend, therefore the Portfolio Manager’s actions may not always be lucrative. 

• Liquidity Risk

Some of the equities in which the investor has invested may not be very liquid. Though PMS service providers will make every effort to keep investments in less liquid equities to a minimum, the investor will still be exposed to liquidity risk.