White OAK India Equity Portfolio

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About Company

White Oak Capital Group provides Indian equity investment management and advisory services based on solid investing ideals that strive to generate long-term concrete outcomes for all stakeholders. White Oak provides investment services to individual and institutional clients in India and throughout the world through a variety of fund vehicles registered in India, Ireland, Mauritius, and the United Kingdom, in addition to segregated managed accounts for renowned global institutions.

Background of WhiteOak Capital Group

  • One of the few in the industry with DNA of investment management
  • Group of Professionals led by an investment professional as ‘Founder’ to get

SEBI license to set up an Asset Management Company (AMC)

  • Core competence in domestic and global emerging equity markets

Why WhiteOak Capital

Large Investment Team: Covering ~1000 Stocks with more than Rs. 1000 Crore Market Cap

Balanced Portfolio Construction: Portfolio of Pro-cyclical and Counter-cyclical stocks to help reducing macro economic shocks

Sectoral Analyst: Team within Team Structure : Each sector is tracked by several analysts for in-depth analysis

Analysts’ Experience: Many analysts in team are tracking the same sector for more than a decade

Forensic for Negative List of Stocks: Helps reduce possible accidents due to poor corporate governance

Tactical Allocation to Small Caps: to capture compelling opportunities in this segment

Focused Investment Culture

Performance first

People: Team of Sector Experts with Global Experience Deep bench of Seasoned Stock Pickers Team within Team Structure

Bottom-up Stock Selection-based Philosophy: Buy great businesses at attractive values. Invest in business, don’t bet on macro

Time Tested Process: Disciplined Fundamental Research Proprietary Opco Finco TM analytical framework

Balanced Portfolio Construction: Aim to avoid top down bets on macro factors Aim to ensure performance a function of stock selection

Fund Snapshot

Year of Inception 2018
Number of Stocks 51
Investment Horizon Long Term
Fund Managers White OAK Capital Management Consultants LLP
Structure Close-ended Category III Alternative Investment Fund
Investment Objective The objective is to generate sustained capital appreciation through superior returns over time
Fund Tenure Initial tenure of 4.5 years
Drawdown Period 25% at the time of investment and rest 75% over 3 tranches before final close
Sponsor Contribution Rs.10 Crore or 5% whichever is lower
Benchmark S&P BSE 500 TR
Operating Expenses At actuals, capped at 0.20% per annum of the Net Capital Contribution
Set-up Cost 2% of Gross Capital Contribution
Redemption On maturity of the Fund

White OAK India Equity Portfolio

Prashant Khemka, the former CIO of Goldman Sachs Asset Management’s India Equity and Global Emerging Markets Equity divisions, launched White Oak Capital. The four pillars of White Oak’s performance-first investment culture include a stock selection-based philosophy, a high-caliber research staff, a rigorous analytical approach, and a balanced portfolio design framework. White Oak has research teams in India and Singapore and sales and distribution centres in Switzerland and the United Kingdom.

The four pillars of White Oak’s performance-first investment culture include stock selection-based philosophy, a high-calibre research staff, a rigorous analytical approach, and a balanced portfolio design framework.

Investment Philosophy

  • Our investment strategy is based solely on fundamental stock selection from the bottom up.
  • We invest in businesses based on stock selection rather than macro factors, which is a simple but powerful investment philosophy.
  • We believe that investing in great businesses at attractive prices yields outsized returns over time. A great business is well-managed, scalable, and generates higher returns on additional capital.

Attributes They look for

Superior returns on incremental capital

  • Industry competitive intensity
  • Sustainable competitive advantage

Scalable long term opportunity

  • Industry potential versus current size
  • Expanding market share and scope

Strong execution and governance

  • Drive to create long-term value
  • Interests aligned with minority shareholders

Valuation Framework

Intrinsic value = present value of future cash flows

  • Economic FCF rather than accounting one
  • Terminal value based on greatness of business

Value excess returns on capital vs capital employed

  • Assess cash flows net of cost of capital
  • OpcoFincoTM multiples for relative comps

Aim to avoid businesses with weaker characteristics

Poor corporate governance

  • Siphoning of cash or value
  • Manipulation of stock prices
  • Unethical business practices
  • Misaligned interests
  • Examples
    • Numerous across sectors
    • Certain commodity companies

Weak returns on incremental capital

  • Excessive competition in capital-intensive industry
  • Mis-allocation of capital
  • Empire building
  • Examples
    • Conglomeration without capabilities

Substitution or obsolescence risk

  • Existential threat from technological developments
  • Examples
    • Print media from online
    • Wind energy from solar
    • Combustion engine from electric vehicles

Investment Process

  • Observe a broad universe: Screen out poor governance Avoid weak characteristics Stay alert to structural changes Look for desired attributes
  • Identify and research great businesses: Analyze in depth Maintain ongoing research Assess relative greatness 
  • Invest in the attractively valued: Wait until value emerges Act when opportunity presents 

Aim to adhere to a time tested analytical framework in a disciplined manner

  • Company visits & field work Supply chain meetings
  • Business Assessment Financial modelling
  • Combination of business & value Compare across opportunities
  • Business evolution Monitor value gap

Aim to ensure performance is a result of skill rather than chance

  • Balanced portfolio of select companies agnostic to benchmark
  • Focus on ensuring alpha generation is a function of stock selection
  • Aim to consciously avoid market timing or sector rotation or other such top-down bets
  • Understand, monitor, and aim to contain residual factor risks that are by-product of stock selection
  • Typical exposure limits Single stock: 10% at market value, Single promoter group: 25%

About Fund Manager

Prashant Khemka : Founder & CFA, White Oak Capital Management

Prashant Khemka Portfolio - Fund Manager White OAK

 

Mr. Prashant R. Khemka is the founder and Managing Director of White Oak Capital Management, founded in June 2017. A Mumbai native, Prasad was born on 4 November 1971. He has a Bachelor of Engineering in Mechanical Engineering from the University of Bombay and an MBA in Finance from Vanderbilt University.

Initially, he worked at State Street Global Advisors as Assistant Portfolio Manager in Boston after completing his MBA. Prashant has also worked as the chief investment officer and lead portfolio manager at Goldman Sachs Asset Management.

An experienced investment professional, he has worked in business development, portfolio management, and other business operations for more than two decades.

Meet the Team

Aashish P. Somaiyaa : CHIEF EXECUTIVE OFFICER

Aashish P. Somaiyaa CHIEF EXECUTIVE OFFICER

Aashish is responsible for strategizing, growing and managing the operations. Prior to joining White Oak Capital, Aashish served for nearly 8 years as Managing Director and CEO of Motilal Oswal Asset Management Company, one of the highly regarded and differentiated boutique equity managers in India backed by excellent performance track record and well documented investing philosophy. Starting with about ₹1,300 crs ($150 mn) in 2013, Motilal Oswal AMC grew to >₹42,000 crs ($5.6 bn) of equity assets across portfolio management services, alternative investment funds, offshore funds and domestic Mutual Funds. Motilal Oswal was awarded Brand of the Year at the CNBC India Business Leadership Awards in 2018.

Prior to Motilal Oswal AMC, Aashish was heading sales and distribution of ICICI Prudential AMC for their MF, PMS and Real Estate offerings through multiple distribution channels across India and Middle East. He has led new product development, product management, communication and distribution channel delivery over a number of years. Aashish has over 20 years’ experience in business strategy and management, process driven sales and distribution, product development and marketing of investment offerings. He has been engaged with India’s private sector asset management industry for pretty much its entire growth trajectory post 1998.

Aashish holds a Bachelor of Engineering in Polymer Science from Pune University and a Masters in Management Studies in Finance from NMIMS, Mumbai University.

Capital Allocation

Allocated Category Allocation Percentage
Large Cap 42.9%
Mid Cap 23.1%
Small Cap 27.1%
Cash / Equivalent 6.9%

Top 5 Stock Holdings

Name of The Stock Allocation Percentage
ICICI Bank Ltd. 9.35%
HDFC Bank Ltd. 7.27%
Infosys Ltd. 5.28%
Nestle India Ltd. 4.49%
Ambuja Cements Ltd. 4.05%

Top 10 Allocated Sectors

Sector Name Allocation Percentage
Financials 24.3
Consumer Discretionary 15.3
Commercial Services 3.7
Consumer Staples 9.3
Health Care 9.5
Industrials 8.5
Information Tech 13.3
Materials 8.6
Real Estate 0.6
Cash/Futures/Others 6.9

Fund Analysis

PE 22.2%
Standard Deviation 20.3%
Beta 0%
Alpha -13.2%
Average Historical Churning NA

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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.