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Fund Snapshot
| Number of Stocks | 15 – 25 Stocks |
| Fund Tenure | 6 years from the date of first closing; extendable by 1 year post approval from investors |
| Fund Type | Closed Ended Category III AIF |
Philosophy
- Target is to create meaningful alpha in long term
- Identify and invest in big return generating ideas and avoid momentum
- Being contrarian is a necessity to outperform a benchmark meaningfully over the long term
- Flexibility to allocate across cap curves and in both structural & opportunistic ideas
Investment Objective
The primary objective of the Fund will be to carry on the activity of a Category III AIF, as permissible under the AIF Regulations, to generate absolute total returns by adopting a bottom-up investment process. The portfolio will be a multi cap portfolio with investments in large, small and mid-cap stocks, as well as units of other Category III AIFs, with the objective of seeking long term capital appreciation. The Fund would have a concentrated target portfolio of about 20 (twenty) stocks which would typically range between 15 (fifteen) to 25 (twenty-five) stocks.
The number of Portfolio Entities in the portfolio is indicative and would be determined by the Investment Manager based on the opportunities, available funds for investment and market conditions. The Fund’s investments will focus predominantly on structural growth stories and a portion of allocation to cyclical turnaround stories to achieve the objective of the Fund. The Fund will invest across market caps and will be sector agnostic
Value opportunities
- Concentrated portfolio with meaningful allocation to high conviction ideas
- Structural high growth stories tend to get underappreciated in short term mostly
- Low liquidity in mid & small cap space do offer large value opportunities during market down cycles
- Cyclical businesses provide excellent contra opportunities during weak industrial cycles
Our Track Record in Identifying Opportunistic Equities
- With a track-record of over a decade, our Voyager portfolio has delivered an impressive alpha of ~6% since its inception.
- The portfolio has grown ~7.0x vs ~3.7x in the benchmark. Rs. One crore invested in 2011 has made Rs. 3.3 Cr more than the benchmark in this time.
- We are certain that the reasons for the consistent out-performance has been 1. Disciplined investment in to compounding and 2. Meaningful investment into mid and small cap opportunities in cyclical sectors.
Resilient performance
The down-capture ratio of <100 is indicative of the overall out performance of the portfolio vs. the benchmark in down-market conditions
ATLAS Performance
- The fund was launched in the month of May 2022
- The funds collected have been deployed into stocks of various sectors to the extent of 95.7% as at 28th of February 2023.
- The top sectors where the investment are made are Banking, chemicals & petrochemicals, Finance sector.
Private banks preferred over PSU’s
- Private Banks are preferred over public sector banks as they depict higher growth.
- High ROA, above 1.5% to handle down cycles
- ROE > 15%, capital to grow consistently
- Leverage Technology
- Private banks are spending ~0.25% of assets on technology
- Banking services and loan sourcing > 80% digital
- Branch addition to capture market share from NBFCs
- Lower ticket size to address larger opportunity
Technology as a key differentiator to defend and grow
- Online sector has high growth potential
- Online companies entered capital markets with a bang, promise to deliver stupendous growth and at unprecedented valuations.
- Only a few companies have moat to grow at 30-40% and be profitable in next 3–5 years.
- Online beauty, fashion, food, logistics, insurance have potential to grow ahead of traditional business.
- Such high growth companies are now available at reasonable valuations vs. traditional companies.
Enablers of higher penetration
- Formalization of economy
- Open architect databases – Aadhaar, E-Way bill, GST etc
- UPI revolution in India – Rs.8 trillion by value
- There are 30cr monthly UPI users in India (2021)
- 50% + customers do online search and buy offline
- 50% + customers do online search and buy offline
Capital structure and fees
| Class | Minimum investment | Management fee p.a. | Hurdle rate with high watermark | Performance fee |
| A1 | Rs. 1 crore – 5 crores | 2.50% | Not applicable | Not applicable |
| A2 | Rs. 1 crore – 5 crores | 2.25% | 10% IRR (pre-tax) p.a | 15% |
| A3 | Rs. 5 crores | 2.25% | Not applicable | Not applicable |
| A4 | Rs. 5 crores | 2.00% | 10% IRR (pre-tax) p.a | 10% |
Exit Load (Adjustment to NAV on exit)
<12 months from final closing or final drawdown, whichever is later
- 5% of NAV plus applicable taxes, duties, and levies (i.e., exit value)
> 12 month <= 24 months from final closing or final drawdown whichever is later
- 4% of NAV plus applicable taxes, duties, and levies (i.e., exit value)
> 24 month <= 36 months from final closing or final drawdown whichever is later
- 3% of NAV plus applicable taxes, duties, and levies (i.e., exit value)
> 36 month <= 48 months from final closing or final drawdown whichever is later
- 1% of NAV plus applicable taxes, duties, and levies (i.e., exit value)
> 48 months from final closing or final drawdown whichever is later
- NIL
Redemption allowed from the immediate quarter of the final closure/drawdown whichever is later. Notice to be provided 20 business days prior to the relevant quarterly exit window.
OTHER TERMS:
- Administrative Expenses: Up to 0.25% p.a.
- Organizational Expenses: Up to 2.00% (as applicable)
- All expenses indicated are excluding applicable taxes
- Management fees will be calculated on the daily average AUM and charged monthly in arrears
- Drawdown: Initial Drawdown – 30%; Subsequent Draw-downs – At discretion of Investment Manager
