Inam Asset Management Company Pvt. Ltd (Enam AMC) is completing 25 years in October. Asset Manager has a single investment philosophy distributed across three platforms: Enam India Core Equity Portfolio, Enam India Diversified Equity Advantage Portfolio and Enam India Equity Portfolio. For its next phase of growth, the company will launch three new products, another Portfolio Management Services (PMS) product, an Alternative Investment Fund (AIF) and an Undertaking for Collective Investment in Transferable Securities (UCITS) to target retail and is planning to do. mid-market segment.
Jiten Doshi, Co-Founder and Chief Investment Officer, Inam AMC, spoke to Mint about the company’s future plans, market outlook and India’s growth story. Edited excerpt:
Tell us about the history of Inam AMC.
We are the asset management arm of Inam Group. We will complete 25 years on October 3 this year. We have the longest-serving single-manager track record, and we manage over $3.4 billion in assets. We have a domestic PMS, an offshore fund and an SMA platform for large institutional investors looking to invest in India. We have pioneered socially responsible investing in India. In fact, we are signatories to the United Nations Principles for Responsible Investment (UN PRI).
What is your strategy in Bounty AMC?
We have only one strategy, which is growth oriented. We have seen almost all market cycles since 2001. We have a long-term track record of delivering over 20% CAGR across all market cycles with an alpha of around 5%.
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Can you tell us how was your situation during the COVID crisis?
The pandemic was something new to the world, and many businesses suffered a major setback as they went through a structural change. During this period, I think many sectors especially service-oriented sectors were seriously challenged. We also went through several recessions in various industries. During those periods, we saw some changes in the portfolio, and I think we positioned the portfolio for a big boom in the economy. During 2019-20, the Indian economy was already slowing down, but in 2020, we can feel a strong recovery by the end of March 2021. So as we restructured our portfolio to participate in growth in the areas of home improvement, discretionary consumption, staples. And many other industries, where we got a lot of value and high growth.
In terms of customers, you weren’t too aggressive about increasing the number. Has it changed over time?
On the current platform, our average ticket size exceeds 5 crore, which is the highest in the industry. This is a very exclusive service where we approach a customized portfolio for our clients. So, on current platforms, we don’t really believe in expanding the numbers, it’s more in terms of AUM per customer which grows. That’s why we are focusing on this. We a. are about to enter the mid-market segment with PMS of 5 million ticket size will be launched by the end of this year to ensure wider participation of investors across the country. We now want to offer something where we can encourage participation from the retail and mid-market segments.
What is your expense structure in terms of performance and management fees?
Our management fee varies from 1.5% to 2.5% depending on the product. And of course, we have special pricing for big ticket separately managed accounts (SMAs), which we discuss directly with our customers. We are the most favorable PMS as we do not charge any performance fee; We have no lock-in period and entry or exit load.
Can you tell us about the investment philosophy that you follow when choosing stocks?
We look for businesses that are well positioned to capitalize on emerging growth opportunities across the country. We look for businesses with high-entry barriers and moat, something that allows businesses to maintain the pace of earnings growth and bring greater predictability and sustainability to the business model. Additionally, these businesses must be run by high quality managements who practice the best standards of corporate governance, disclosure and transparency.
India has historically traded at a premium to other emerging markets? Do you think it will last?
I don’t think when you are comparing India with Brazil or Russia or South Africa, we are making the same comparison. India has a very wide base of very high quality companies in every sector. Obviously, India will trade at a premium in a predominantly commodity-driven market that does not have high quality companies. Indian markets are well ahead of many other emerging markets in terms of ownership, governance and transparency.
India deserves to be at a premium to these markets, given that most businesses here offer very good Return on Capital Employed (ROCE).
Is there a particular sector on which you are bullish?
We are very optimistic on the financial services sector, which mainly includes all private sector banks, NBFCs and general insurance. We are also bullish on home improvement and discretionary consumption. The sectors that we basically believe may come under pressure in the times to come will be metals and commodity sectors like oil and gas.
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