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Fund Snapshot
| Year of Inception | Nov – 2020 |
| Number of Stocks | 15-20 |
| Investment Horizon | Long Term |
| Fund Managers | Anup Maheswari and Mayur Patel |
Investment Philosophy
The 360 One High Growth Companies Fund Category III AIF fund seeks to invest in companies that have the potential to grow at a significantly faster rate than the economy over the next few years. These firms are expected to expand at least in the high teens and to have long-term competitive advantages – proprietary intellectual property, strong leadership, distribution/cost advantages, or entry barriers specific to the respective sector – that enable them to expand.
Investment Strategy
Secular Growth
The key drivers are:
- Large industry opportunity
- Market leadership
- Longevity of growth
- Sustainable competitive advantage (brand, distribution, technology etc.)
Sector mappings are:
- Auto & auto ancillaries
- Consumer discretionary
- Private sector financials
- Insurance
- Retail
Defensive Growth
The key drivers are:
- New products and distribution – gaining market share
- M&A
- Technology upgrade
Sector mappings are:
- Consumer staples
- Healthcare
- IT services
- Media
Cyclical Growth
The key drivers in this case are:
- Management change
- The uptick in the industry cycle
- Completion of the CAPEX phase
- Turnaround of business
Sector mappings are:
- Industrials and infrastructure
- Private-sector corporate banks
- Logistics
- Oil & gas
Investment Framework
There are four framework segments. These are Cyclical Growth, Secular Growth, Defensive Growth and Value Traps.
- Secular growth contains the core portfolio of 50 to 80% of all allocations.
- The tactical allocation includes the segments of Critical Growth and Defensive Growth. These two have 20 to 50% capital allocation.
Investment Objective
The 360 One High Growth Companies Fund Category III AIF scheme strives for long-term capital appreciation by investing in equity and equity-related securities of companies with high potential earnings growth.
Unique Feature
Industry/sector potential:
- Avoid sectors vulnerable to regulation,
- High competitive intensity, technological changes, and
- Short growth cycles, as well as large industry opportunities scalable over time.
Business:
- Companies with sustainable competitive advantages and
- Higher ROEs than peers, and companies with poor free cash flows and declining market share, should be avoided.
Governance:
- Avoid companies with frequent equity dilutions,
- Excess leverage, and
- Unrelated investments.
Valuations:
- Offering a favourable risk-reward ratio,
- Valuations are not the only investment criteria, and
- Value traps and short-term fads should be avoided.
