Marcellus Investment Managers was founded in 2018 with their main objective of impacting the Indian economy’s effective capital allocation. We plan to accomplish this by directing household savings into high-quality Indian enterprises with a long history of sound governance and capital allocation. Our portfolio management strategy not only strives to provide healthy returns to our investors but also to do so by assuming relatively moderate risks. Marcellus’ core investment management team has been together for 15 years, and their experiences and lessons learned throughout that time have shaped the company’s investment philosophy. SEBI has granted Marcellus permission to provide Portfolio Management Services (PMS, SEBI registration number INP000006183) and Investment Advisory (IA) services. The Marcellus Consistent Compounders are our flagship investment product. Services for Portfolio Management (CCP). CCP’s investing approach aims to put money into a small number of substantially moated companies that can generate robust earnings compounding over long periods of time with little volatility. The PMS offers enticing performance-based fee choices that align our interests with the investors. It also boasts one of the most cost-effective cost structures in the PMS market, with no entrance, lock-in, or exit loads.
|Year of Inception||16th Aug 2021|
|Number of Stocks||15-20|
|Investment Horizon||3-5 Years|
|Fund Manager||Ashvin Shetty CFA|
Investment Philosophy & Methodology
Marcellus believes in producing wealth with simple and accessible means. Marcellus aims at designing a transparent and trustworthy system for its investors. Their investment approach is based on three primary pillars:
Clean Accounting is the initial stage of choosing the best companies. Here Marcellus has over six years of consolidated financials for the universe of firms. Then comes the ranking and comparing part of the firms. Clean accounting framework is taken from Howard Schilit’s legendary text on forensic accounting, “Financial Shenanigans.”
The next stage involves building portfolios and holding them for the subsequent ten years without any churn. A return of 20%-30% per year can be expected from this exercise. Portfolios with such volatility are similar to those with Government of India bonds.
The final stage includes judging companies based on their management teams. Marcellus looks for companies with focused management and companies that have deepened their competitive moats over time.
The advantage of the above philosophy can be seen in their returns. The power of compounding becomes strong with such a philosophy. Also, this methodology reduces transaction costs and has aided in overcoming the pitfalls.
The construction of the Marcellus Rising Giants Portfolio makes it special. A portfolio is built of 15-20 businesses from a universe of 450+ companies in this market that pass Marcellus’ own capital allocation and forensic accounting criteria as well as our bottom-up stock selection approach.
- The universe: Stocks with Market Cap between US$500mn -10bn (about 450 companies)
- Forensic Accounting Screen – Eliminate companies with sub-par accounting
- Filter sustainability of fundamental parameters like revenue growth, ROCE, reinvestment rates
- Bottom-up research and analysis
- 3rd party/channel checks, management meetings
- 15 Rising Giants
Investment universe: Listed companies in India in the USD 500m – 10 bn market cap range.
1. Clean books and effective government.
2. Firmly defended market leaders in specialized industries that consumers haven’t fully explored.
3. Proven track record of capital allocation with significant investments in the core business and ongoing attention to growth-oriented adjacencies
Fund : ‘Marcellus Rising Giants Fund’ (‘Fund’) is an open-ended CAT III AIF scheme with an AUM target of raising at least Rupees Twenty Crores or such higher amount as thought fit by the Investment Manager
Term : The Rising Giants AIF is an open-ended fund
Structure : Marcellus Capital Trust (“Trust”) is formed in India as a contributory determinate trust set up by the Settlor under the Indian Trusts Act, 1882 and has received SEBI’s approval as a Category III AIF. Marcellus Rising Giants Fund is the first scheme of the Trust. Marcellus Investment Managers Private Limited is the sponsor and the investment manager of the AIF. Vistra ITCL (India) Limited is the trustee to the Trust.
Minimum Investment : For new clients – INR 5,00,00,000 (INR Five Crore) For existing clients – INR 1,00,00,000 (INR One Crore) subject to overall AUM with Marcellus (including AIF) totalling to at least INR 5cr.
Lock-in Period : 15 months from date of each capital contribution in the fund
At Marcellus, Their Purpose is to make wealth creation simple and accessible by being trustworthy and transparent capital allocators. Their philosophy at Marcellus has evolved from the ideas of Kirby and Thiel, which we have refined further.
Is there any zero fixed fees option with Marcellus?
The consistent compounders PMS comes with zero entry and exit load and with no lock-in.
Investors can choose from below three models:
- A fixed fees model (2% p.a. set fees + zero performance fees) or
- A variable fees model (zero fixed fees + performance fees of 20% profit share above a hurdle of 8%, no catch-up)*
- A hybrid model (1% p.a. fixed fees + performance fees of 15% profit share above a hurdle of 12%, no catch-up).
What type of companies forms part of the Marcellus portfolio?
The portfolio is agnostic to parameters like market caps. Consistent compounders portfolios are large and liquid stocks of cash-generated companies
What is the average churn in the Marcellus portfolio in a year?
Marcellus believes in less churning; thus, there has not been more than 5-8% annual churn on average.
When can you sell a stock in this portfolio?
There can be two conditions when you are likely to sell a stock in the portfolio:
- Occurrence of sudden events that will shake the prospects of a business.
- A gradual change in the industry can instigate you to sell the stocks.
Is there any contract between Marcellus and its clients?
Yes, there is a contract between Marcellus and its clients before taking up any management assignment of funds. It is a written agreement that clearly defines the inter-relationship and details as mentioned in Schedule IV of the SEBI (Portfolio Managers) Regulations, 1993.
What is the meaning of no catch-ups?
It defines a situation where the profit share will be applicable only on the incremental return over and above the hurdle rate.
Who is appointed as the custodian to Marcellus’ PMS accounts?
Kotak Mahindra Bank Limited has been appointed as the custodian.
What is the process to change the fees schedule?
The Fees structure can only be amended on 1st Apr that is the new financial year. Clients are required to show their desire to change the fees structure for the upcoming financial year.
Are there any other charges incurred by a client in the Marcellus PMS?
For knowing in detail about the charges and expenses, feel free to contact https://aifpms.com/. Write your queries related to investment, and we will get back to you soon.
About Fund Manager
Ashvin Shetty, CFA
Ashvin Shetty is a bachelor in commerce graduate from Narsee Monjee College, Mumbai. He is a further qualified chartered accountant from ICAI, India. Mr. Ashwin later also qualified as a chartered financial analyst from CFA Institute, USA.
Ashwin Shetty has an experience of more than ten years of experience in equity research. He gained knowledge and expertise in Indian accounting standards and financial statement analysis from 2004 to 2007. During these three years, he worked at KPMG’s and Deloitte’s statutory audit departments.
From 2010 to 2017, Mr. Shetty at Ambit Capital led the coverage of the automobile sector. In 2013 and 2016, he was ranked in the Starmine analyst awards for the ability he holds in stock picking. Till 2018, Mr. Shetty worked as a senior analyst at Ambity Capital for Mid and small-cap PMS funds. He is currently working as a portfolio manager for Marcellus’ Little Champs strategy.
Saurabh Mukherjea, CFA, FRSA
Saurab Mukharjea is a student of St.Columba’s School. He is a bachelor of science specializing in economics from the London School of Economics and Political Science. Mr. Mukharjea further pursued his master of science from the same college. Post his master’s program, Mr. Mukherjea joined London Economics as a senior consultant for two years. He worked as a consultant at Accenture Strategy Practice from 2000-2003. For more than seven years, Mr. Mukherjea led the Indian equity department at the Noble group as the head of Indian Equities. He worked with Ambit Capital from 2010 to 2018 as the CEO.
Mr. Mukherjea joined Marcellus Investment Managers as an Investments team member in August 2018. He is also a great writer and has written four bestselling books that are ‘Gurus of Chaos’(2014), ‘The Unusual Billionaires’(2016), ‘Coffee Can Investing: The Low-Risk Route to stupendous wealth’(2018), and Diamonds in the Dust.
Pramod Gubbi, CFA
Pramod Gubbi was a student of Carmel High School. He was also a student of MES Pu College of Arts, Commerce, and Science. Mr. Gubbi is a bachelor in engineering specializing in electronics from The National Institute of Technology, Karnataka. He completed his master’s in business administration in finance from the Indian Institute of Management, Ahmedabad.
Pramod Gubbi_Marcellus Before pursuing his master’s, Mr. Gubbi worked as a software engineer at Philips Semiconductors, Bangalore. After his master’s, he joined HCL Technologies as an Assistant manager. Pramod Gubbi was also an analyst under the equity research team on UK small and mid-cap technology companies at Clear Capital for three or more years. In 2006, he became a Director at Clear Analytics. Mr. Gubbi also was the director of equity sales at Execution Noble for two and a half years. He worked with Ambit Capital for more than seven years. He joined Ambit Capital as the director of Equity Sales and later was promoted to MD in 2016. Mr. Gubbi Founded Marcellus Investment Managers in 2018.
|Product - AMC||Category||AUM (in Cr.)||Performance||1M||3M||6M||1Y||2Y||3Y||5Y||10Y||SI|
Consient compounderAMC Name: Marcellus Inc Date: Dec-18
Rising GiantsAMC Name: Marcellus Inc Date: Dec-21
Little ChampsAMC Name: Marcellus Inc Date: Aug-19
|BSE small Cap||-0.61||7.73||17.34||11.34||9.15||23.33||NA||NA||18.69|
Kings CapitalAMC Name: Marcellus Inc Date: Jul-20
Global Consistent CompoundersAMC Name: Marcellus Inc Date: 28-Oct-22
Rising Giants - AIFAMC Name: Marcellus Investment Managers Private Limited Inc Date: Aug-21
|BSE 500 TR||-0.61||7.73||17.34||11.34||9.15||NA||NA||NA||11.10|
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.