|Fund name||Asset Class||License|
|Vantage Equity Fund||Not known||SEBI AIF Cat 3|
|Long Term Equity Fund||Not known||SEBI AIF Cat3|
|Name not known||Not known||SEBI AIF cat3|
About the AMC
- Founded by Kenneth Andrade.
- 3 AIF funds – 2 closed ended and 1 open ended fund
- Key staff- Kenneth Andrade,Chief Investment Officer prior work experience portfolio management at IDFC Asset Management Company
- G.V. Alankara, Chief Compliance Officer of Old Bridge Capital Management Pvt. Ltd
Prior work experience- Head of Institutional Equity Sales at PINC Securities, Prior to that, he worked with SSKI Securities as the Head of Dealing, prior to that he worked with Canbank Mutual Fund.
- Apurva Luthiya, Chief Financial Officer also oversees the responsibilities as a portfolio administrator at Old Bridge Capital Management. Prior work experience- IDFC Asset Management , prior that he worked as Assistant Manager – Assurance and Business Advisory services at PwC in their Financial Services Group. Also an Associate member of the Institute of Chartered Accountants of India.
- Ruchi Pandey, Investment specialist. Prior work experience, Senior vice president & Head Products at HSBC Global Asset Management. Also has experience in Product Management, Sales & Distribution and Wealth Management and has worked across Asset Management and Banking Sector with companies such as IDFC Mutual Fund, ICICI Prudential Mutual Fund, ABN Amro Bank and Yes Bank.
Investment Philosophy AIF
Monopolistic/Consolidators of the Industry
• Preference for consolidating businesses
• Companies gaining market share with no change in capital employed
• Companies with lowest cost in their industry
• Leaders at the end of consolidating cycle Leaders at the end of consolidating cycle Leaders at the end of consolidating cycle Leaders at the end of consolidating cycle Leaders at the end of consolidating cycle usually end up with higher market share and pricing power
Capital Efficient Business
• Companies that migrate upwards from a low RoE
• Look for capital employed to be controlled
• Cash flow positive nature of the business with low gearing
Low Financial Leverage
• Companies with negligible debt
• Businesses leveraging into an economic up -cycle & deleveraging at the top of cycle
• “Out of favour” businesses where current value of the stock reflects its depressed earnings
• EV / Sales
• Market Cap / Cash Profit (Flows)
(stock picker, maintain margin of safety)
Kenneth Andrade, source – Motilal Oswal Wealth Management, YouTube, February 2019
Platform name – Livemint, Date- 24 Nov 2017, Reference- https://www.livemint.com/Companies/cPOQbx5ctVIZS8aCklxfcJ/Old-Bridge-Capital-to-launch-first-Category-3-AIF-of-Rs400-c.html
The old bridge capital has 3 AIF funds, 2 closed ended and one open ended.
Vantage Fund- its a three-year closed ended category 3 AIF. Vantage Equity Fund will focus on investing in companies which are operating in industries that are not doing well and which have depressed valuations.
“Themes that we will focus on include midcap rural focused businesses, manufacturing and engineering businesses and early cycle asset intensive businesses such as infrastructure. We will look to build a portfolio of around 25 companies.
While the fund will look at investing in sectors and companies that are not doing well, it will stay away from companies with high leverage. “From an investment style perspective, we take enough of business risk, we do not want to add financial risk. The dynamics of the stock change dramatically with high leverage,”
Also, in the initial phase, the fund will not look at investing in financial services businesses, he added.
Apart from its latest AIF, the firm currently also runs a portfolio management service (PMS) and two closed ended AIFs, Vantage Equity Fund and a fund dedicated to non-resident Indian (NRI) investors.
“It (the latest fund offering) is more of an open-ended product that allows us to take subscriptions on a regular basis and there will be weekly exits. We have made it a little more convenient for longer term investors and we have improved the liquidity of the product for them. Long term investors can participate in this product over a period of time subject to a limit of 1,000 investors. So it is a product in perpetuity now,
The latest Old Bridge fund will seek investments from domestic investors as well as NRIs and foreign portfolio investors (FPIs), except for investors from Canada and the US
PMS, the Vantage Equity Fund and our long term equity fund – the underlying portfolios will be almost the same. They will have an approximately 80% overlap,” said Andrade.
Across all the products –
The firm’s investments are largely concentrated on the industrial economy in India and in businesses such as agri-inputs and mechanization of the farm and mid cap segment.
“Close to about 60% of our portfolio is in industrial and the farm economy. The next decade that will come through, we think that the balance sheet focus – both of the government as well as the banking system – which is reasonably consumer, retail centric will shift focus. We have put a reasonable amount of capital to work in the place where banks are under invested from the lending side,” said Andrade, adding that he also finds valuations in these spaces quite attractive.
Topic/Title Navigating through uncertain times, Media platform name- BloombergQuint, Date- March10,2020
Repercussion of Covid, impact and recovery.
Topic/Title- Why Kenneth Andrade Is Optimistic About 2019, Media platform name-Bloombergquint, Date- Dec,2018
General economic view
Topic/Title- Key triggers of market, also discussed about the allocation of funds in his portfolio.
Media platform name- CNBC TV-18
Discussed mid cap and small cap scanner, market will remain volatile, macro risk and comparison with 2013. Also discussed the allocation in the Old Bridge Capital (30 percent agri and allied , optimistic on non urban market (agriculture) 12 per power gen and exch, 10 per cable and broadbands and chemicals, significant amount of opportunity in these sectors , got government’s support , specific stock allocation Shakti Pumps, Jain irrigation, Kaveri, JSW Energy, Mac Power. No exposure in Pharma, IT and financial service as they are mature, pricey and little scope for arbitrage.
Topic/Title- Alpha Moguls With Old Bridge Capital’s Kenneth Andrade, Media platform nameBloombergquint, Date-jul,2018
Short term market perspective. His investment philosophy- starting with companies, moving up to sector (bottom up), bottom of the cycle(trough) and valuation comfort. Buy index for inflation beating returns.
- You have 3 AIF funds, your insight on why do you have different funds?
- “PMS, the Vantage Equity Fund and our long term equity fund – the underlying portfolios will be almost the same. They will have an approximately 80% overlap,” said Andrade. Can you give insight on why these funds overlap each other? What is the safety net that you maintain in order to reduce the risk?
Prepared by – Vanshika Bagrecha, May 2020
Peer reviewed by – Ridhima Jaisinghani, 11th May