ValueQuest

Funds ManagedAsset ClassLicense
VQ GrowthMulticapPMS
VQ PlatinumMulticapPMS

About

Founded in 2010, ValueQuest is a boutique SEBI-registered company with a strong focus on the equity markets. founders, Ravi Dharamshi and Sameer Shah have more than two decades of equity experience. ValueQuest has multiple portfolio management strategies and filed for a CAT II fund. With a research rigor, practiced only by investors, ValueQuest has been consistently outperforming the BSE 500. We have built long-term relationships based on:

  • Fairness
    Alignment of interest with client
  • Transparency
    All costs and negatives disclosed upfront
  • Trust
    Built over a period of time through actions
  • Proactiveness
    In thought In communication In actions

 Key staff

Ravi Dharamshi

Ravi Dharamshi the founder and Chief Investment Officer (CIO) of ValueQuest, an investment management firm based in India. He has delivered 20%+ returns since inception in VQ Platinum, one of the company’s flagship funds.

Ravi comes from a family with a legacy in investing and has an MBA in finance. Prior to founding ValueQuest, he had a stint at RARE Enterprises. He has experience of more than 22 years.

Sameer Shah

Sameer Shah is a co-founder of ValueQuest, an investment management firm based in India. Sameer has been instrumental in delivering 20%+ returns in the last 10 years for VQ Growth, one of the company’s flagship funds.

Sameer is a Chartered Accountant by profession and has over 22 years of experience in the financial services industry. Prior to co-founding ValueQuest, he worked with firms like FCG Centrum, Sharekhan, and BRICS Securities.

Investment philosophy (for the firm)

Investment manager aim to outperform the benchmark or index against which their performance is measured. This is because their clients expect them to generate returns that are superior to the benchmark. Managing money is another critical aspect of an investment manager’s focus. They make investment decisions that align with their client’s investment objectives and risk tolerance while also adhering to their investment philosophy and approach. While it’s important to be aware of market trends and the “flavor of the season,” a good investment manager should not be swayed by short-term market movements or fads. Instead, they focus on long-term investment opportunities that align with their investment philosophy and approach.

VQ Growth’s universe consists of 500-600 companies that have passed their quality filter. The focus narrows down to 150-200 companies that meet the growth filter. From this group, the investment team selects a core of 30-50 companies that meet their valuation filter. Finally, the portfolio is concentrated to hold only 8-12 companies with high growth potential.

VQ Growth

VQ Growth is an equity fund that emphasizes investing in fundamentally sound, well-researched companies with bright future prospects irrespective of market capitalization. The aim is to maximize the power of compounding by picking high-quality companies with a proven track record at reasonable valuations and then letting compounding do its magic over a rolling 3-5 year time frame. The portfolio strategy and approach focus on absolute returns with a concentrated portfolio of up to 10-15 stocks customized per client mandates.

The portfolio is managed by Sameer Shah, who has 22 years of experience in the financial industry. VQ Growth was launched in October 2010 and has a minimum investment of ₹50 Lacs. The fund offers both funds and direct plans to investors.

The benchmark for VQ Growth is the S&P BSE 500 index, which consists of the top 500 listed companies covering all major sectors of the Indian economy. The rationale for using this benchmark is that it provides a broad representation of the listed companies and is suitable for investors seeking long-term wealth creation by investing in equities with an investment horizon of 3 years and above.

VQ Platinum

VQ Platinum fund invests in fundamentally sound, well-researched companies with bright prospects, irrespective of market capitalization. The fund manager, Ravi Dharamshi, who has over 22 years of experience in the financial industry, aims to identify business tailwinds in a company or sector and capitalize on them.

The portfolio is concentrated, with a maximum of 10-15 stocks, and is customized as per client mandates. The investment horizon is 3 years and above, and the focus is on long-term wealth creation. The fund follows a long-term approach with a rolling view of 1-3 years and is market cap agnostic, focusing on absolute returns.

Apart from core portfolio stocks, the fund may include young or new-to-market or turnaround stocks, as well as exclusive deals or special situation opportunities. These stocks will be selected based on business tailwinds and superior risk-reward.

The benchmark for VQ Platinum is the S&P BSE 500 index, which consists of the top 500 listed companies in India, providing a broad representation of the listed companies across major sectors of the economy.

VQ Platinum was launched in July 2014 and is available by invitation only. The minimum investment for the fund is ₹2 crore. The fund seeks to provide long-term wealth creation opportunities to investors while maintaining a diversified portfolio across sectors and market caps.

Media

ValueQuest PMS – Ravi Dharamshi, Founder & CIO

ValueQuest’s investment philosophy is based on the principle of finding companies that change scale and have not yet been recognized by the market. The aim is to invest in companies that have a sustainable competitive advantage and a scalable business model, and are available at a price that does not factor in their future growth potential. The philosophy is based on years of experience in the market, and the approach has evolved over time based on the team’s successes and failures. The team focuses on opportunities that have grown as an inherent part of their potential, and the investment horizon is typically three to five years, although it can be longer. The investment approach is based on analyzing the total market size, understanding the company’s business model and competitive advantage, and evaluating valuations to ensure that they are reasonable given the company’s growth prospects.

In terms of portfolio construction, Value Quest has taken a slightly reverse approach to most investors, starting with concentrated bets and then diversifying over time. They aim to bet as much as possible on opportunities when they spot them but have also evolved to be more circumspect and introspective about what kind of companies to buy and how long to hold. Today, they have a concentrated portfolio of around 8-12 companies, and they focus on investing in high-quality companies that have a track record of generating ROE greater than 15%. They also avoid companies that are unlikely to generate a PAT of 100 crores or more in the near future and avoid aligning with promoters who do not share their wealth with minority shareholders.

The portfolio construction process at the speaker’s firm begins with understanding the client’s risk appetite and profile. They believe in a customized portfolio approach, rather than a model portfolio approach, as different stocks may be in or out of the value zone at different times. Alignment between the client, portfolio manager, and portfolio is crucial for successful wealth creation. The portfolio is customized to the client’s goals and risk appetite and typically consists of 8 to 12 stocks, as the speaker believes in concentrated bets on the top 10 to 15 ideas for wealth creation.

The speaker comes from a school of thought that believes in understanding when to press the accelerator and when to apply the brakes in the market, rather than solely focusing on time in the market. They use the analogy of driving a car to explain this concept. While it’s not about precisely timing the market bottoms, it’s important to avoid getting greedy or fearful at the wrong times. They believe that decisions made at extreme points in the market can have a significant impact on generating alpha, and timing the market is only about avoiding mistakes. They emphasize the importance of staying invested for the long term to avoid losses.

The speaker believes that out of the 5000 listed companies, only 500-600 are worthy of attention based on their size and industry. From this list, they apply quality filters and assess where growth is prevalent, focusing on sectors that are witnessing a tailwind. They use a combination of top-down and bottom-up approaches to select 8-12 stocks for their portfolio, with a rolling view of 3-5 years. They regularly review and adjust their portfolio based on the scenario and their conviction.They assign different weights to each stock depending on their level of conviction in the company’s management, valuation, business fundamentals, and tailwinds. They may assign a weightage of 15% to a stock that we are highly confident about, and a weightage of 10% to a stock that we are less certain about. If they are paying a premium for a company’s growth potential,  may assign a weightage of 5%. they do not invest less than 5% or more than 15% in any one stock. 

So, Ravi Dharamshi presses the sell button when he believes that the company has reached its full valuation from the next three years’ point of view, and he cannot justify the company doubling in value over the next three to five years. He also takes a sell call when his hypothesis goes wrong or there are execution challenges on the part of the management or the company. He admits his mistakes and exits bad companies from the portfolio and keeps adding good companies. He constantly evaluates the risks that are emerging for the industry and the companies and whether the company is gaining or the moat is eroding.

The speaker explains their investment philosophy of being market cap agnostic and focusing on identifying companies that are dominating or growing in their respective markets, regardless of their size. They believe in identifying and investing in companies early on and having conviction in their potential for growth over a 3-5 year period, without getting caught up in labeling themselves as value or growth investors. They prioritize understanding the size of the opportunity the company is addressing and its ability to capture that market, rather than solely relying on the P/E ratio. The speaker emphasizes the importance of focusing on the business

The speaker suggests that investors should focus on finding opportunities to make money over a three to five-year period, rather than getting caught up in labeling themselves as value or growth investors. 

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