Funds managed
| Fund name | Asset Class | License |
| Malabar Capital Trust | Hedge fund | SEBI AIF Cat 3 |
About the AMC
- Founded in 2008, backed by value investors of the US
- Key staff – Akshay Mansukhani, Grishma Shah, Rajat Mahajan
- Akshay Mansukhani- Joined in 2009, BSE and MBA from the Wharton School of the University of Pennsylvania, Chartered Alternative Investment Analyst (“CAIA”)
- He was part of UBS and worked for structured products as part of equity capital markets.
Investment Philosophy (for firm)
The team invests for the long term in a concentrated in small and mid-sized companies that were under-researched and trading at a discount to intrinsic value given their growth prospects and follow bottom up approach.
We are known for creating value through thoughtful, long term investments and have invested in a concentrated portfolio of companies of exceptional quality. We invest in well run, reasonably valued companies which have deep and wide moats around them, resulting in robust cash flows which can be redeployed profitably to grow their businesses over a long period of time. We believe this approach can result in steady compounding of returns at a high rate and outperformance over the long term while taking on limited risks. Our investment process ensures that the companies which we evaluate have demonstrated superior economics and growth trajectory in the past. The investment approach is designed to evaluate the sustainability of these parameters in the future.
Diligence Process
Our diligence process involves understanding the underlying growth drivers in a granular detail, evaluating the strength and sustainability of the competitive moat and figuring out management’s capability and intentions. In order to accomplish this objective we conduct extensive due diligence which involves speaking with various stakeholders including management, competitors, regulators, suppliers, distributors, retailers and also visiting factories, depots and retail outlets.
Significant portion of our time is also spent on assessing whether the management has the drive and the capability to take the business to a level which is multi fold of where it is today.
Investment style
They are long-term, value-oriented investors. Growth is a component of value. They are looking for profitable growth that doesn’t consume a lot of capital focusing on the sustainability of the growth. They run a concentrated portfolio and therefore spend a lot of time researching each company that goes into the portfolio. Finally, the quality of management is critical. In most cases in India, the family that owns the business is also running the business. They will look at management’s track record in terms of capital allocation, treatment of minority investors and so on.
Media
Interview, Off Piste Investing, 1 May, 2020
SUMMARY
While establishing Malabar no investor wanted to allocate capital to a new manager in India focused on small caps. They had to keep costs low and focus on their process. While they found a number of great opportunities and valuation multiples re-rated as this quality was recognized over time.
As bottom-up investors, we look for best players in each field: Sumeet Nagar, Malabar Investments, economic times, 8 sept, 2018
SUMMARY
They look for bottom up approach and find the best stocks of each filed. They aren’t field specific but they look after the growing potential of a particular stock.
Wizards of Dalal Street with Malabar Investments chief, Money Control, 17 Nov, 2016
SUMMARY
According to Sumeet Nagar, When McKinsey looked at opportunities in India, they would find us the best ideas in XYZ sectors and when we did that, some of the best ideas were these small companies that were nimble, they were growing faster, that had good fundamentals and yet they traded at discount, but those investors felt that these were too small to move the needle for them. In the first we invested in companies like Info Edge India, Hawkins Cooker, Page Industries.
Analyst questions
According to you, how important are valuations while stock picking?
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