Kotak India Renaissance Fund-I

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About Company

Kotak Mahindra Asset Management Firm Limited, a company registered under the Companies Operate, 1956, on August 8, 1994, was appointed to act as the Investment Manager of Kotak Mahindra Mutual Fund via Investment Management Agreement dated May 20, 1996, as revised up to the present. It is fully owned by Kotak Mahindra Bank Ltd. The Company has received clearance from the Division of Funds, Investment Management Department, under the SEBI (Portfolio Manager) Regulations, 1993, and the Mutual Funds Division of SEBI under the SEBI (‘Mutual Funds’) Regulations, 1996, to provide Portfolio Management Services.

Fund Snapshot

Investment Manager Kotak Mahindra Asset Management Company Limited
Fund Type Open-Ended Category III Alternative Investment Fund
Initial Contribution Minimum 1 Crore
Fund Strategy Long-Only Fund
Subscription Period Fortnightly*
Redemption Period Quarterly Exit with 30 Business Days Notice*
Exit Load 2% within 12 months; 1% between 12 months to 18 months from the date of subscription
Benchmark Nifty Midcap 100 TRI
NAV Frequency Once a Month
Tax Treatment For Tax Consideration, please refer to relevant section XI in the PPM *

The Asset Management Strength of Kotak

  • Over 20 years of fund management experience may be found at Kotak Mahindra Asset Management Company (KMAMC). In December 1998, it began operating. As of March 31, 2022, KMAMC ranked as the fifth-largest fund firm in India in terms of average quarterly AUM.
  • One of the first few private companies in India to be certified to administer pension funds
  • Providing solutions to clients in other countries for more than 15 years
  • The Monetary Authority of Singapore regulates Kotak Mahindra Asset Management (Singapore) Pte. Ltd., which is also a Registered Investment Advisor with the SEC in the United States.

Kotak’s Edge

With a focus on India and a worldwide presence, Team Kotak is dedicated to offering investors worldwide investment management services of the highest caliber.

  • ‘India-Only’ manager with strong ties to one of the biggest private banks, extensive network
  • Worldwide presence and a wealth of expertise in managing capital across asset classes.
  • 20 years of expertise managing assets for customers that are based overseas
  • Large teams present on the ground to ensure comprehensive and wide-ranging research coverage
  • A cautious, institutional investment strategy combined with effective risk management
  • Solid knowledge of Indian corporate governance frameworks
  • Successful asset management firm with over $50.46 in total assets under management
  • Offshore fund structures that are knowledgeable about global legislation

What Kotak Avoid

Practically speaking, it is harder to know what is good than what is terrible. Therefore, Kotak first concentrate on eliminating “poor” along the following 10 categories before deciding between the “cannot be rejected on any factor.” Avoid corporations with inferior traits and poorly controlled businesses.

They are seeking businesses with the following qualities:

  • Good theme
  • Large market opportunity
  • Favorable industry dynamics 
  • Low potential for disruption 
  • Sustainable competitive advantage
  • Strong management/background/strategy/growth
  • Strong corporate governance & Execution 
  • Superior return on incremental Capital
  • Medium-term positive triggers 
  • Reasonable Valuations

Key Themes

  • Big Getting Bigger, Strong Getting Stronger
  • Revival of Ind Manufacturing & Private 
  • Real Estate & Home Improvement
  • Exports Opportunity 
  • Digitization 
  • Financialization

Investment Objective

The Fund’s investment goal is to increase Beneficiaries’ wealth through long-term capital growth through investments in Portfolio Vehicles I that are listed on recognized Indian stock exchanges or (ii) that are expected to be listed. Although the Fund will diversify across market caps, it will lean toward mid- and small-cap investments. The investments may be made in debt instruments, and equity preferred securities, or other products as may be allowed under AIF Regulations.

Investment Framework

  • Business: Size, Scalability, Competition, Sustainability
  • Management: Vision/growth orientation, Corporate Governance, Execution track record, Capital Allocation
  • Valuation: Growth at a reasonable price, ROE/ROCE/Free cash flow

Portfolio Construct

  • Listed & traded in India: ~4866 stocks
  • Market Cap of > Rs 1500 crs: 861 stocks
  • Under research coverage: 437 stocks
  • Businesses will profit from increased consumer discretionary spending, massive infrastructure investments, and a recovery in GDP. It will benefit businesses with minimal fixed costs, low leverage, and robust balance sheets. 
  • ~ 25-40 Stock Ideas based on BMV

Dedicated In-house Research Team

  • An analyst runs exemplary portfolios. The sector model portfolio.
  • Calls for capitalization Internal algorithmic guidance for making allocation recommendations for large-and mid-cap stocks
  • Sectors
  • Interaction with industrial participants in the sector
  • Discussions with sector experts at brokerage houses on a regular basis
  • There are typically 8 to 12 management meetings per analyst or fund manager per month.

Stocks:

  • Investee company updates every three months
  • Businesses with direct coverage receive at least two visits per year
  • At least once a year, meet with the senior management.

Reuters Starmine

  • All sell-side research is available.
  • Choose the most competent sell-side analyst at the stock level

Strategy Synopsis

Objective

Although the Fund will diversify across market caps, it will lean toward mid- and small-cap investments.

Stock Holdings

25 to 40 stocks, chosen from the bottom up

Risk Mitigation 

Emphasis on free cash flows and management quality

Flexibility

Unconstrained w.r.t sector

Portfolio Focus – Investment Themes

  • Big Getting Bigger, Strong Getting Stronge
  • Revival of Industrial Manufacturing & Private sector 
  • Exports Opportunity
  • Real Estate & Home Improvement
  • Digitization
  • Financialization

Key Sectors

  • Consumer Goods: 23%
  • Industrial Manufacturing: 17%
  • Industrial Manufacturing: 14%
  • Pharma: 10%
  • Information Technology: 7%
  • Chemicals: 5%
  • Cement & Cement Products: 6%
  • Consumer Services: 4%
  • Automobile: 4%
  • Metals: 3%
  • Fertilisers & Pesticides: 2%
  • Construction: 2%
  • Cash: 3%

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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.