Funds managed
| Fund name | Asset Class | License |
DSP India Enhanced Equity Fund | Hedge fund (Long-Short) | SEBI AIF Cat 3 |
DSP Emerging Stars Fund | Hedge fund | SEBI AIF Cat 3 |
| DSP AIF Pharma Fund | Hedge fund | SEBI AIF Cat 3 |
| DSP Core Fund | Hedge fund (Long Only) | SEBI AIF Cat 3 |
| DSP India Enhanced Equity SatCore Fund | Hedge fund (Long-Short) | SEBI AIF Cat 3 |
| DSP High Conviction Fund | Hedge fund | SEBI AIF Cat 3 |
- Source – All funds managed under AIF
https://dspim.com/docs/default-source/amc-financials/dsp-im—annual-report-2018-19.pdf?sfvrsn=4
- The total assets under management of AIF Fund as on March 31, 2016 is Rs. 5,068 million
https://www.dspim.com/docs/default-source/amc-financials/dsp-blk-2015-16.pdf?sfvrsn=2
About the AMC
- The DSP Group, headed by Mr. Hemendra Kothari, is one of the oldest and most respected financial services firms in India.
- The DSP Group’s joint venture arrangement with Merrill Lynch Investment Managers in 1996 established its retail asset management business in India. The business subsequently went on to become DSP BlackRock Investment Managers in 2008.
- Earlier DSP group was known as DSP BlackRock, a Joint Venture between the DSP Group and BlackRock.
- As on May 7, 2018, The DSP Group bought back BlackRock’s 40% stake in DSP BlackRock Investment Managers Pvt. Ltd and the firm is now known as DSP Investment Managers Pvt. Ltd. And DSP BlackRock Mutual Fund is now become DSP Mutual Fund.
- Manages/advices assets in excess of Rs. 1,10,000 crore ($ 16.5 billion) across equity, fixed income and alternatives (as on 30th April 2018) with over 2 million individual investors.
- The DSP Group, the family behind the asset management firm, was one of the founding members of the Bombay Stock Exchange, and is one of the oldest financial services companies in India with a history of over 152 years.
- Key staff:
- Kalpen Parekh (President) – Kalpen Parekh is the President of DSP Investment Managers Pvt. Ltd. and a member of the Executive Committee. Kalpen has over 19 years of experience in sales across client segments, distribution and marketing. He was previously Managing Director and Head of Sales & Marketing at IDFC Mutual Fund. He has also served in Birla Sun Life Asset Management Company Limited and ICICI Prudential Asset Management Company Limited after beginning his career with L&T Finance Ltd.
Kalpen holds a Master’s Degree in Management Studies in Finance from the Narsee Monjee Institute of Management Studies, as well as a Bachelor’s Degree in Chemical Engineering from Bharati Vidyapeeth, Pune.
- Gaurav Pant (Fund Manager) – Gaurav joined DSP BlackRock in March 2014 as part of the Alternative Investment Business. After completing his PGDM from Indian Institute of Management Ahmedabad, Gaurav started at the London office of Goldman Sachs working in the Financing Group of the Investment Banking Division. In 2007 he moved to the Goldman Sachs Principal Strategies division, focusing on European equities. Gaurav joined Dalton Capital in 2011 and set up a long-short fund for Indian equities.
- AIF Funds details
- DSP India Enhanced Equity Fund – open ended scheme was the first scheme offered by DSP AIF Fund in April 2014. The portfolio contains both long and short positions.
- DSP Emerging Stars Fund – a close ended scheme in December 2015
- DSP AIF Pharma Fund – a close ended scheme in August 2016
- DSP Core Fund – a close ended scheme in September 2016
- DSP India Enhanced Equity SatCore Fund – open ended scheme in February 2017
- DSP High Conviction Fund – an close ended scheme in January 2018
Investment Philosophy (for firm)
DSP India Enhanced Equity SatCore Fund
Source – https://www.pms-aif.com/investments/dsp-india-enhanced-equity-satcore-fund/
The fund will have a portfolio divided between portions representing two different strategies:
• Investment Strategy: Core portfolio where fund manager purchases securities with intention to hold them for a reasonably long duration
• Trading Strategy: Satellite portfolio where fund manager purchases securities with intention to trade; fund may have sizable frequency and volume of securities transactions
Investment Objective
The Scheme seeks to maximize long term risk-adjusted returns through the use of a long and/or short equity strategy from a portfolio that is substantially constituted of equity securities and equity related securities of issuers domiciled in India. The total gross exposure on account of long and short positions in the Scheme cannot exceed 200% of the net assets of the Scheme.
- DSP India Enhanced Equity SatCore Fund – Open Ended Structure
- Portfolio Construct: Gross Exposure – Maximum Exposure : 200%
- Majority of capital in core high conviction ideas (approx. 20 investments comprise 80% of the portfolio risk); Maximum 10% of corpus per investment; Net Exposure Possible to be Net short based on market view
DSP Core Fund
Source – http://content.icicidirect.com/idirectcontent/MailImages/DSP_BlackRock_Product_Note.pdf
Investment Objective – Generate wealth from a concentrated portfolio of 15-20 securities of companies, primarily in broader consumption and government spending/reform related sector, with a strong growth potential
Investment Strategy – Identify high-conviction securities through bottom-up selection; take sizeable interest with buy-and-hold approach
Key parameters assessed: Sound industry prospects, Competitive advantage within the industry, Quality management, 1-3 year earnings power significantly above the industry average, Free cash flow generation, Superior ROCE profile, Undervaluation in relation to the fundamentals and growth
Media
Title – Outlook 2020 – DSP
https://www.dspim.com/docs/default-source/market-insights/dsp-equity-team—outlook-2020.pdf?sfvrsn=2
Summary – I was hoping to get some details of AIF but it only covers sector views and performances of DSP mutual funds especially equity funds.
Title – Gopal Agrawal talks to Kalpen Parekh, YouTube-DSP Mutual Funds, Dec 10, 2019
Summary – This is the video series of different Fund Managers of DSP Mutual funds with Kalpen Parekh and mostly talking about the strategies they use for the funds they manage. I think most of it is related to Mutual Funds.
Title – DSP Mutual Funds website- News and Insights
https://www.dspim.com/news-category/news
Summary – Most of the news I checked were related to either mutual funds or short term impact of something in the market
Title – Investment Philosophy by Atul Bhole, DSP website, Nov,2018
Summary – Nothing relevant to AIF. Investment Philosophy of other equity funds managed by Atul Bhole
Title- Quarterly Report of AIF, Apr-June 2016
Summary – Introduction about the economic situation and markets and performance of DSP Blackrock India Enhanced Equity Fund, a Long-Short AIF. Portfolio long and short top holdings is given but the report is too old.
Analyst questions
- L/S funds will typically have a 40-60% net long exposure, which is considered to be beneficial as markets generally trend upward over time but there are other strategies like long biased or short biased or market neutral strategies. What is your strategy?
- DSP Core fund seems like a thematic fund where you invest in consumption and government spending/reform related sector with strong growth potential. How do you choose stocks in this sector? How do you define growth?
Prepared by – Sonal Narwani
Peer review – Shivani Kadam
Date – 11th May 2020.
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