Helios India Long/Short Fund

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About Helios

The parent company of Helios is Helios Capital Management Pte. Ltd. (“Helios”), situated in Singapore. Helios is registered as a foreign portfolio investor with the Securities and Exchange Board of India and holds a capital markets services licence from the Monetary Authority of Singapore. The 2005-founded Helios manages a worldwide long-only fund and long/short, and long-only funds/mandates specifically focused on India.

The founders of Helios, Dave Williams, Karan Trehan, and Samir Arora, were pioneers in the Indian asset management market and jointly established one of India’s first private sector AMCs in 1994. They have extensive expertise in senior asset management (in their prior roles). In the Indian fund management industry, Samir Arora has one of the longest track records (26+ years on the long side). With a track record of more than 15 years, he is among the most seasoned India fund managers on the short side.

Senior staff from Helios and Helios India have been closely collaborating for more than ten years, and we anticipate continuing this relationship for a very long period. We have the most extensive cumulative experience investing in India among alternative funds, and more crucially, we have remained solidly together throughout periods of market volatility in India. We are united by our common conviction that India has a fantastic stock market and our unwavering confidence in our ability to provide investors with competitive returns underpinned by complete transparency.

Fund Snapshot

Nature of the Scheme Open-ended Category III AIF
Fund Manager: Dinshaw Irani / Abhay Modi
Minimum Capital Commitment: INR 1 Crore
Top Up 25 Lacs and in multiple of 5 Lacs
Lock-in Period: 3 Months
Exit Load: Upto 3 Months – Lock-in, >3 months upto 15 months – 1% of NAV
General Range of net (Long-Short) exposure: 30% to 90%
General Range of Gross (Long + Short) exposure: 75% to 175%
General Range of Long side exposure: 60% to 120%
Range of Short side exposure: 10% to 60%
Number of longs: 30-50: Number of individual stock shorts: 15-25
Performance Fees: 15% without catch up
Trustee Amicorp: Trustees India Private Limited

Investment Philosophy

Over the past 25+ years, the investing ethos of the Helios India Rising PMS has evolved. With over 100 years of direct India investing expertise, our staff is among the most knowledgeable in the Indian fund management industry. Having covered the same market for so long offers us a major advantage. We have a greater knowledge of the psychology behind Indian markets and are familiar with the backgrounds, strengths, and weaknesses of most company managers, owners, sell-side analysts, and strategists.

The true difference between investors is no longer information but knowledge, given the abundance of financial and business channels, quarterly results and conference calls, several conferences and management road shows, social media and blogs, and substantial sell-side coverage. It is more crucial to incorporate this data into insightful conclusions using a strong and consistent framework than merely chasing raw data. The combined expertise of the financial experts on our team is particularly important in this situation since, as we are all aware, “What you see relies on what you have seen.” And we’ve witnessed a lot.

Investment Objective

The AIF aims to increase capital over the long term by investing in Indian public equity. As permitted by the SEBI (Alternative Investment Funds) Regulations, 2012, the Fund will invest in securities. 

Working with simple rounded numbers for easier understanding

  • Consider a market that increases cumulatively by 420X in positive months and decreases cumulatively by -98% in negative months. The market has returned 740% or 8X over the entire period.
  • If one can save 1% cumulatively over all months, performance will increase to 13X, or a total return of 1160% (i.e. down -97% in negative months).
  • To achieve this level of performance (13x), performance in the good months must be 630X (while performance in the bad months must decrease by -98%).
  • Earning 210x larger returns in the good months is comparable to a 1% lesser drawdown in the bad months. Savings made during downturns influence portfolio returns more than additional earnings produced during upturns in highly volatile markets.

Money Saved Is Money Earned: Works In All Periods

2008 is left out of performance analysis for illustrative reasons. The Indian market would have increased by 1937.7% since July 31, 2005, if 2008 hadn’t happened. It would be absurd to expect an L/S fund (which has a net exposure to the market in a much smaller range) to beat long-only benchmarks and peers in this extremely strong market environment over the past 17 years. But by losing less in the bad months, our parent’s India-focused L/S Fund (Helios Strategic) significantly outperformed itself even during this time.

Investment Strategy

    • General Range of net (Long-Short) exposure: 30% to 90%
    • General Range of Gross (Long + Short) exposure: 75% to 175%
    • General Range of Long side exposure: 60% to 120%
    • Range of Short side exposure: 10% to 60%

Short Positions

  • The fund’s primary strategy will be too short individual stocks on India’s highly liquid futures markets.
  • In contrast to long portfolios, which could have sector biases, shorts will be sector-neutral.
  • Positions will normally be kept for three to twelve months for single stock futures selected from the bottom up.
  • In most cases, the fund will hold 15 to 25 positions, each with a weight of 1.0% to 2.0%.
  • Most common factors for shorting:
    • High/unsustainable leverage
    • Regulatory developments
    • Price-based competition
    • Expected disappointments in earnings
    • Declining growth at very high valuations
    • The overhang of government divestment etc 

Portfolio Construction

  • Consider investing in subjects that exhibit “Non-zero-sum competition” with relatively low penetration, competition with government-owned firms, significant tailwinds, and a long runway for secular growth
  • Even while 10-15% of the portfolio may not (at any moment) be in favoured themes, it should nonetheless provide value or a trigger
  • Two tiers of rejection The whole cosmos is first condensed to the “Helios research universe.” To reach the list of “stocks that cannot be rejected on any factor,” the second level of rejection is performed within the “Helios research universe.”
  • Further bottom-up analysis to arrive at a “to OWN” list 
  • Valuation philosophy:

The robust portfolio needs to have 2 kinds of stocks:

  • High confidence in reasonable returns
  • Reasonable confidence in high returns
  • Number of longs: 30-50; Number of individual stock shorts: 15-25

Portfolio Restrictions

  • Liquidity restrictions for at least 60% of the portfolio
  • Portfolio: with at least six different industries represented, Maximum industry weight of 35% (cash positions + net of futures contracts) of net assets; maximum weight in one stock of 10% (in practise less than 7.5%). 
  • Short exposure: Mostly through futures on a single stock. Using options sparingly or selling indices/sub-indices
  • General Gross exposure range: 75-175%
  • General Net exposure range: 30-90%
  • Maximum exposures allowed: Gross: 200% & Net: 150%

Short Positioning:

  • The fund’s primary strategy will be shorting individual companies on India’s extremely liquid futures markets.
  • In contrast to long portfolios, which might have sector preferences, shorts will be sector-neutral.
  • Positions will typically be held for three to twelve months for single stock futures selected from the bottom up.
  • In most cases, the fund will hold 15 to 25 positions, each with a weight of 1.0% to 2.0%.

Investment Risk Control

  • Diversification among industries, across the capitalization spectrum, and in terms of growth and value can lower the risk from any one factor
  • Limits on a person’s exposure to stocks are 10% of net assets for long holdings and 4% of net assets for short positions. No additional investment should be made in long holdings over 7.5% and short ones over 3%-3.5%.
  • Top 250 companies with “liquid” trading volume over the previous six months
  • No new investments may be made in stocks that are not deemed to be “liquid” up to a maximum appreciation of 50% based on the performance of the group. Investment in each of these stocks is limited to 4.0%, with a maximum increase of 6.0% depending on performance.
  • Underperforming stocks are continually reviewed, but there are no formal stop-loss rules.

About Fund Manager

Dinshaw Irani- Chief Investment Officer of Helios India

Dinshaw Irani

Helios India’s Chief Investment Officer is Dinshaw Irani. He spent more than 14 years as the Executive Director of Artemis Advisors, Helios Singapore’s exclusive research advisors, before then. Dinshaw oversaw all aspects of the research project as the CEO of Artemis Advisors, from idea generation and industry outlook to final recommendation. He established Sharekhan’s portfolio management services division while serving as their principal portfolio manager from 2003 to 2004 before joining Artemis in 2005.

Prior to working at Sharekhan, Dinshaw spent more than three years as a vice president on the consumer and pharmaceutical industries’ Asian Emerging Markets team for Alliance Capital in Mumbai. Prior to Alliance, Dinshaw had positions at Lloyd Securities and Sun F&C Mutual Fund. Dinshaw likes exploring new locations so he may spend time outside in nature preserves and on hiking trails. Dinshaw possesses a post-graduate diploma in rural management from the Institute of Rural Management, Anand, and a degree in commerce with honours. Dinshaw has 28 years of combined investment experience.

Mr. Abhay Modi

Helios India’s Head of Research is Abhay Modi. Abhay spent more than 12 years as the executive director of Artemis Advisors, which served as the sole adviser to Helios Singapore. Abhay was in charge of coming up with ideas and recommending investments at Artemis Advisors in the infrastructure, capital goods, insurance, banking, and financial services industries. Prior to joining Artemis, Abhay held positions at Duff & Phelps, Indian Hotels, and Reliance Capital. NIT Rourkela awarded Abhay his engineering degree, and in 1993, the Indian Institute of Management in Ahmedabad awarded him his MBA. Abhay has 26 years of investing experience in total.

Product - AMC Category AUM (in Cr.) Performance 1M 3M 6M 1Y 2Y 3Y 5Y 10Y SI

Helios India Rising Portfolio

AMC Name: Helios Capital Management (India) Private Limited Inc Date: 3/16/20
Multi Cap
889.47 Strategy 6.80 11.45 19.95 32.04 12.78 19.24 NA NA 25.94
NSE 500 TRI 8.03 12.35 18.52 26.55 15.15 20.41 NA NA 27.26

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Disclaimer: Investing Involves Risk. This document is for information purposes only and should not be viewed as a legal offering document or solicitation. Offers to invest in this fund are made only by the Discretionary Portfolio Management Services Agreement. Past performance does not guarantee future results and there is no assurance that the managed accounts will necessarily achieve their objectives. We do not guarantee any returns in the hand of investors not we take any sort of accountability for the performance of the scheme. The above-mentioned data is collected from the respected Fund house please verify the same at SEBI website.