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|
- First step of Marcellus Little Champs is to position stocks on each of the 12 ratios individually. These ranks are then accumulated through parameters to give a final order on the accounting standard of stocks.
- Objective of the Marcellus Little Champs investment team is to conduct research focused on 12 accounting ratios, including income statement (revenue/gains handling), balance sheet (correct representation of assets/gains), cash pilferage and quality audit checks.
Find small-cap companies (market capitalization less than US$500 million) that have a solid track record of corporate governance and capital allocation, as well as competitive advantages based on brands, processes, and strategic assets.
- Usual avoid candidates from the “Zone of Terrorism”
- Greater than the median performance on each factor (revenue growth, asset turnover, etc..) plus the top 20 per cent of performance overall (the “cream of the crop”) + avoiding businesses that struggle to pay their debt and capital costs
- Laden businesses examination of management interviews, annual reports, and other public reports in great detail
- Combining independent perspectives on governance and capital allocation with channel input to support the “management version”
- 12 accounting ratios that examine cash theft, accurate reporting of assets and liabilities on the balance sheet, and income statement manipulation.
- Consolidated historical financials span six years.
- Companies that score highest on each of the 12 measures separately (some examples are outlined in the table on the right). These rankings were then added together based on several criteria to provide a final ranking of the accounting quality of stocks.
- The renowned forensic accounting book “Financial Shenanigans” by Howard M. Schilit inspired the selection of these ratios.
As discussed, please find below a brief write-up on Marcellus Portfolio. The portfolio will typically have 12-15stocks.
One of the strategies that we have recently launched is Marcellus’ Portfolio – this strategy has a minimum ticket size of Rs. 15 crores and has been specifically created for investors who want a customised portfolio. Marcellus’ portfolio is a multi-cap strategy and consists of Marcellus’ most high conviction bets which have been selected using the following steps:
- Forensic accounting: Identify companies with clean accounts using Marcellus’ proprietary forensic model. At Marcellus, the first step across all its strategies is to eliminate companies with poor quality accounting – this eliminates a large universe of listed stocks (please click here for our newsletter on the importance of accounting quality).
- Capital allocation: Identify companies with a track record of superior capital allocation using Marcellus’ proprietary capital allocation framework (please click here for our newsletter on the criticality of prudent capital allocation for consistent compounding).
- High barriers to entry: Out of companies which pass the above two steps, identify companies which have high barriers to entry.
The Marcellus Portfolio will consist of stocks which meet with the above three criteria irrespective of whether these are small cap companies or large cap companies.
Option 1:Fixed fee: 2.50%
Fixed fee: 1.50%
Hurdle Rate: 10%
Performance fee: 15% (without catchup)
About Marcellus Investment Managers
Saurabh Mukherjea PMS Portfolio – Marcellus Investment
Marcellus Investment Managers is a SEBI registered portfolio manager with an AUM of ~Rs. 11500 crores. Our flagship product – the consistent compounders portfolio has outperformed the benchmark (Nifty 50) by ~18% since inception with a return of 29% on an IRR basis since inception in Dec, 2018. Marcellus’ investment strategy is to invest in a concentrated portfolio of heavily moated companies that can drive healthy earnings compounding over long periods with very little volatility. Our approach to portfolio management does not just focus on delivering healthy returns to our investors but also aims to do so by taking relatively low risks. Marcellus’ core investment management team has been together for 15 years and their journey and learnings over the years underpin its investment management philosophy (please click here for more details on our investment philosophy).
Pramod Gubbi CFA (Marcellus)
Pramod is in charge of Marcellus’ business development initiatives.He also serves on the Investment Committee, which discusses and approves the firm’s investment plans. Pramod formerly worked at Ambit Capital as the MD and Head of
Institutional Equities. Pramod was previously the head of Ambit’s Singapore office.Pramod worked at Clear Capital in sales and research before joining Ambit.Pramod has worked
as a technology analyst as well as for companies such as HCL Technologies and Philips Semiconductors.Pramod earned a B.Tech from Regional Engineering College in Surathkal and
PostGraduate Diploma in Management from the Indian Institute of Management in Ahmedabd.
For any queries, contact us on Mobile: +91 836 858 6435, Landline: 020-48627339,Toll Free: 1800 210 1995, Email: [email protected]
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.