|Primario Fund Style
|SEBI AIF Cat 3
|Long / Short Fund Style:
|Long short equities
|SEBI AIF Cat 3
Other licenses could be PMS
About the AMC
- Fund Manager- Chakri Lokapriya
- 20 years of managing Absolute and relative BRIC and Global funds at J.P. Morgan, New York; BNP Paribas Investment Partners, London; Franklin Templeton, India. Currently leading TCG AMC.
- New York University, Leonard N. Stern School of Business, MBA Finance, New York, 1994. Registered Investment Qualifications and licenses
- TCG AMC incorporated in 2004, managing Offshore, AIF, PMS, Equities and Debt funds. TCGAMC is led by Chakri Lokapriya.
- TCG Asset Management company invests & manages offshore US $ denominated country funds including India rupee funds.
Investment Philosophy (for firm)
They infuse primary capital in listed as well as unlisted companies in the form of preferential allotments, qualified institutional placements, initial public offerings, pre-IPOs and institutional placement programs. The firm provide growth capital or late-stage investments wherein company is sitting with 40-50% capacity utilization, has some amount of working capital and long-term funding mismatch and therefore needs to set right its capital structure. Our capital will help them refinance its long-term debt which will lower interest expense, increase profitability and therefore create the environment for sustainably high stock price
- Disciplined, Structured Investment Process: Select Total Universe; Rank listed companies based on Mkt. cap and other metrics; Quantitative ranking on sector-specific parameters; Shortlist companies.
- Invest across sectors and companies; accelerating revenue & profit potential top down overlay.
- Due diligence of individual companies; Fundamentals competitive positioning & management quality.
- Portfolio of 20-50 companies; Liquidity adjusted weights; Risk vs. Returns.
SMF distribution fund (category – III)
- SMF is a disruption fund and invests in companies making and using new age materials such as composites, disrupting traditional ones such as metals, and forestry goods.
- Human aspiration for being stronger, lighter, faster, and environment friendly is driving these product advances.
- Fund invests majority in innovative companies, plus enabling sectors across capitalization through secondary and primary offerings.
- Invests majority in SMF, and the balance in other sectors. 3 year investment horizon, multi-cap. Fund aims for high absolute returns vs. index and carries high risk of investing including capital loss.
Internal media page
Covers – NDA 2.0 , new fund by TCG Asset management
Crux – NDA2.0 fund revolves around the NDA’s claim to make India 5 trillion economy. If a sector or policy is backed by the government, it should be able to generate revenue. Hence a fund dedicated to 12 new areas backed by government (for example- digital space- Paytm)
Tell us about the NDA 2.0 strategy that TCG AMC Scheme is focussing on. What are its constituents, how would the portfolio be positioned and what is the thinking behind designing such a strategy?
“The thinking behind the strategy is on one hand, if Modi 2.0 wants to make India a $5-trillion economy, then the various policy initiatives in various sectors should in a sense translate into revenues and orders and therefore earnings for companies. Then it becomes a goal of our fund to identify such companies which will benefit from the new policy initiatives and grow that kind of number over the next five years.”
How will this particular strategy be different from the three other strategies you are already running at TCG AMC in terms of the stocks which it will have or positioning in terms of market capitalisation?
One we have looked at thematic funds in terms of one of our previous funds which was focussed on recapitalising India by providing growth capital or turnaround capital but again that is past as now we are looking at an environment where cyclically things will turn up for India. These are both largecap and midcap and the broader market will participate in this growth. Over the last two or three years, the index returns has largely been led by a handful of companies but in this recovery, going forward, we would see both large as well as the broader market participating in this growth and we have designed that keeping in mind that new sunrise sectors will emerge and they have found place in the portfolio.
Which are these areas where you expect new government policy initiatives and push to be so meaningful that it will lead to good earnings growth in that kind of companies Also, what are the new themes you are looking?
The government’s track record in the last five years has been very good in the sense that there has been some very big bang reforms like NCLT, the bankruptcy code and the GST.
Now Modi 2.0 is likely to be a continuation of Modi 1.0 and the market always likes continuity because it provides clarity. Against this backdrop, you will see a lot of pickup, various initiatives bearing fruit and this will give birth to a number of new sectors. The government has focussed on 12 new areas and so the fund will focus on these 12 areas.
Prof Aswath Damodaran, Stern School of Business, NYU; S Naren, CIO, ICICI Prudential AMC and Chakri Lokapriya, CIO & MD, TCG AMC debate the trade-off between numbers and narratives in a discussion.
( Including only the section covered by Chakri Lokapriya)
Chakri, you have been operating currently last couple of years in India but have been wearing a hat of an emerging market fund manager for some time now. Haved you faced this tug of war in other markets as well? Give us some example when you are managing money in London and New York?
Chakri Lokapriya: Narratives and numbers do matter across geographies, across markets and as Naren was pointing out there is probably lesser in one country versus the other. But again in today’s world where data, information everything moves much faster than it did before a business model that happened in the US, it would take many years for it to be replicated in India if you rewind back let us say 20-30 years ago. But today that knowledge transfer happens much more faster and But today that knowledge transfer happens much more faster and therefore it is sometimes become easier where you just look back at the other markets that you invest in, made a mistake where or eventually that the narrative went wrong or the numbers did not keep up with the narrative and try to avoid those in the local market that you are operating in.
The other thing is that being a fund manager or even an individual investor who analyses the narrative for a sector or stock and then takes bet or sometimes waits patiently for the numbers to start trickling in before building a position. Does it have more relevance for a particular size of a company? Is it more large cap oriented issue or more midcap or you think it is agnostic of a size of the company?
Chakri Lokapriya: It is a good question. To think about it. every large company today was small at some point in time. Let us take Reliance Industries NSE -0.52 %, one of the largest companies in India and so long the narrative and the numbers behind the company was its refining business and its E&P business.
Today the company is growing big in telecom where it is killing the competition and now it is going into ecommerce. It is also one of the biggest retailers. So here you have one of the largest companies in India which has grown over time with the narrative of all oil analysts.
In the past, oil analysts covered Reliance Industries. Today an oil analyst needs to know the telecom industry, he needs to know the retail industry to get a grip on Reliance Industries as a stock. So, it is not just the narrative of oil on Reliance anymore but you have new narratives which are adding on to the past valuations or rather which is increasing the valuation if they get it right.
Prepared by – Vanshi & Taniya
Peer reviewed by – <name>