In the last couple of years, the Indian market has given extraordinary returns. With that, a lot of portfolio and wealth managers have mushroomed in recent times leaving investors confused as to how and whom to rely on for quality advice. In such a scenario, Equitree Capital Advisors represents one of those PMS companies which remain actively engaged with the investors and offer nonchalant advice – keeping only investors interests in mind and not flowing with the market sentiments. The company ensures that investors understand their investment strategy and risks associated with it well enough and set their return expectations accordingly.
A Companion in the Growth Journey
Equitree Capital Advisors Limited started as a proprietary investment office focusing on investing in emerging small and micro-cap companies with a private equity approach. It has recently morphed into a SEBI registered Portfolio Manager and has opened its doors to accept third-party funds from like-minded investors.
The company has been consistently creating alpha returns for its investors by identifying emerging businesses early and staying invested throughout the growth journey. The Equitree team comprises of super specialists & focused investors in small and micro-cap companies; companies typically in the market cap range of Rs. 200 cr – 3000 cr.; a domain largely catered to by High Net-Worth Individuals (HNIs) or occasionally by a few semi-institutional investors. The niche of the company is in identifying these under-invested / under-researched ideas early on and riding on the growth journey with them.
Leaders with “Touch & Feel” of Businesses
Pawan Bharaddia & Ssuneet Kabra, are founders of Equitree Capital Advisors Limited and have been long-standing friends for over two decades. Both are Chartered Accountants by education and bring in forty years of collective experience in investing and allied activities.
Pawan commenced his career with global organizations like JP Morgan Chase (then Chase Mahattan Bank) and ABN Amro. He moved on to doing private equity investing way back in 2001, a time when private equity as an investment class was still in a nascent stage in India. Since then he has had an extremely successful stint making investments in small and micro-cap companies across a diversified range of industries.
Ssuneet, on the other hand, has been an in-house advisor to a range of small and micro-cap companies. He has dabbled in an entrepreneurial role himself, managing his family businesses also. He has been an extremely astute and successful investor in real estate. They bring a unique combination of “touch and feel” of how Indian businesses work on the ground. This distinction has been a cornerstone for the success of the company.
Strategic Focus on Small Companies
Equitree’s investment domain is flooded with high volatilities as these businesses and promoters remain untested by the larger markets and therefore don’t find participation by the larger institutional investors. However, the experience in understanding of businesses on the ground gives it an edge to reduce these volatilities and identify winners early on. Over the years, the company has been able to pick up the winners early across different sectors like Defense, Building Materials, Agriculture, and Industrial Pipes and so on. These attributes within the company have enabled it to deliver a consistent IRR of over 25% over the last six years. Protecting the capital takes first priority than focus on quick returns and it is more biased towards downside risk protection even at the cost of giving up riskier quick returns.
The Distinct Products and Services
Equitree follows the classical fundamental, deep value investment strategy. Their maiden investment scheme under the PMS – “Equitree Emerging Opportunities” adheres to this philosophy to the hilt.
This product is completely focused on investing in small and micro-cap companies. Typically companies in the market cap range of Rs. 200-3000 cr are considered in this category. These companies are generally under-invested and under-researched by the markets.
Their proprietary research team looks for a combination of high growth of at least 20-25% during the investment holding period, committed and passionate managements with zeal to scale up business and reasonability of valuations before deciding on any investment opportunity.
Creating value in a reasonably de-risked manner
A natural growth almost always follows a slow transformative process but conditions for growth are not constant and there is a constant change. Whatever happens all of a sudden is most probably unconstructive for growth. Focus on returns is a significant factor, but it is necessary to first protect the capital of investors. The right growth conditions are created with utmost care and detailed attention. This careful attention is what Equitree offers to its clients for small and micro-cap investment.
The company gives preference to the downside risk protection and does not mind giving up riskier quick returns. Risk of negative returns is avoided by keeping a watch for market valuation risks along with management related risks and liquidity risks associated with the stocks in the portfolio.
Active investing through Constant Monitoring
Equitree empowers its investments by consistent monitoring of its portfolio. Careful watch of industry changes, monitoring of the company performance, tracking the developments within the company and also on actions taken by the management are part of the regular monitoring of investment portfolio. Equitree believes that successful investing is not only in identifying a right investment but is more in knowing when to sell it – a close and constant monitoring is what provides the acumen to constantly review this decision and maximize the returns for investors.
Source :-The 10 Most Valuable Portfolio Management Service Providers in 2018
