Solidarity Advisors

Funds Managed	Asset Class	License
Prudence	Muticap	PMS

About

The investment firm’s intent is to build the most trusted and partner-centric AMC in India, by focusing on long-term outcomes with clients who share this perspective. Their strategy is to work with clients who align with their thought process, focus on good process, be ruthless in recognizing and acting on mistakes, and build a winning culture that encourages debate, respect disagreements, promotes from within, and shares rewards with the team like a true partnership. Their offering is a single product called “Prudence,” which is a multi-cap fund with a 5-year time horizon and low churn. The investment firm offers a great client experience and has a minimum ticket size of 2.5 Cr per family. They prioritize transparency and frequent communication. The firm has around 1500 Cr AUM across approximately 170 families and has achieved 8% outperformance over NSE 500 over a rolling 5-year period. They have also had zero disputes or commercial disagreements with partners since inception.

Principles outline the core values and priorities of an investment firm. The first principle emphasizes the importance of a disciplined and strategic approach to investment with a focus on managing risk. The second principle highlights the importance of building strong relationships with clients based on trust and shared goals. The third principle reflects a commitment to sustainable growth and development. The fourth principle emphasizes continuous improvement and ongoing learning to stay ahead of the curve. The fifth principle emphasizes the importance of balancing financial success with social responsibility and ethical behavior. By pursuing these principles, an investment firm can build a strong foundation for long-term success and make a positive impact on the world.

Key staff

MANISH GUPTA, Founder and Chief Investment Officer – Manish is an MBA from IIM Ahmedabad. He wants to build a business that delivers profits with purpose. Through Solidarity, he is attempting to turn aspirations into reality. Prior to founding Solidarity, he worked for 7 years with The Boston Consulting Group and for 8 years with Rakesh Jhunjhunwala. In his free time, he enjoys traveling, reading, meditation, and looking at the world through his daughters’ perspectives.

MANJEET BUARIA, Partner – With a background in commerce and chartered accountancy, Manjeet brings flexibility and an analytical approach to the investment process. He has cleared all three levels of CFA and has been investing in listed markets since 2007. Besides investments, reading and playing tennis interest him as well.

Investment philosophy (for the firm)

The investment firm primarily invests with an ownership mindset, prioritizing resilience over speed. They allocate capital to businesses they would like to own permanently, with some allocations for deep value. They seek well-run companies that can compound earnings at a rate of 15-18%+ for long periods of time, with a minimum sustainable ROE of 15%+. They look for companies that are riding a secular trend with a low risk of disruption, have market leadership or niche domination, and have a management team that they trust and demonstrate capital allocation discipline. The investment firm is comfortable with some illiquidity in the portfolio and optimizes for 5-year time horizons. They don’t chase what’s hot in the short term and emphasize that the road to the long term is through the medium term. Valuations matter and their bias is to let positions compound, but they will exit if valuations become euphoric and if they can reallocate elsewhere. 

The investment firm’s definition of success is to outperform the index by 3% per annum post fees over a rolling 5-year period while maintaining transparency with partners on their process and avoiding surprises. They employ a multi-cap approach and focus on leadership, with around 45-50% of the portfolio in clear leaders (large caps) and 45-50% in emerging leaders (small and mid-caps). The investment firm avoids rigid ideology and allocates around 10% of the portfolio for special situations with strong price/value divergence. They believe in “good churn” and recognize that they are allocators of capital, not permanent owners of businesses. Their bias is to let positions compound, but they will sell when they encounter behavioral excesses. The investment firm also customizes portfolios and invests where the best opportunities are when capital is provided to them, rather than relying solely on model portfolios. The investment firm maintains concentrated portfolios with around 15-20 positions and a minimum position size of approximately 3%. The size positions are based on the maturity of the business model and the potential upside, with position sizes ranging between 3% and 12%. They emphasize risk management by avoiding poor governance and excess leverage, and they view volatility as not being risk, with the Sharpe ratio not being a useful tool for measuring risk. The investment firm manages liquidity risk by using lower position sizes and constantly tracking its positions.

Media

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Prepared by – Bhanu Prakash, March 2023