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Negen Undiscovered Value Fund
Investment philosophy
Uncovering Undervalued Asset
- Negen strive to identify undervalued assets across different market segments, including Special Situations, Pre-IPOs, and Anchor Book investments.
- By conducting thorough research and analysis, Negen aim to capitalize on hidden value in these opportunities.
Catalyst-Driven Approach
- Negen focus on investment opportunities with identifiable catalysts such as corporate actions, industry trends, or management actions.
- By recognizing and analyzing these catalysts, Negen aim to enhance the upside potential of our investments.
Risk Management
- Negen prioritize effective risk management to protect capital and manage downside risks.
- Our investment decisions are guided by a disciplined approach, rigorous due diligence, and regular monitoring of our portfolio holdings.
- Negen aim to maintain a Negen ll diversified portfolio to mitigate specific risks associated with individual investments.
Investment Strategies
Ratio of investment varies based on opportunities, risk assessment, return potential, market conditions.
- Special Situation Statement
- Anchor Book
- Other Investment
- Pre-IPO’s
Fee Structure
| Particular | Fees |
| Set Up Cost | Capped at 0.5% of commitment amount amortized over first 3 years |
| Investment Management Fee | 1% of commitment amount on average AUM of client |
| Additional Return (Profit sharing) | 10% on gross / pre-tax NAV |
- Minimum investment is 1,00,00,000 (Indian Rupees One Crore)
- Profit sharing is calculated on gross/pre-tax NAV.
- The calculation for profit sharing is done at the end of every financial year, i.e., 31st March, based on adjusted high watermark formula & on an in proportion basis for the management fee.
- Hurdle is Not Applicable
Exit Load and Redemption
| Period | Redemption Fee |
| Within 12 months | Locked In |
| Between 12 months to 24 months | 1% |
| Between 24 months to 36 months | 0.50% |
| After 36 months | Nil |
- Lock-in Period: An investor units are locked in for a period of 12 months from date of its issue and can only be redeemed after that.
- Settlement: When an investor places a redemption request, the units will be redeemed at the prevailing Net Asset Value per Unit on the “Redemption Date” less redemption fee and profit sharing. Units will be redeemed on a “first in first out” basis, unless specific Units are requested for redemption by the Unit-holder.
- Note that payments for redemption requests may take up to 90 Business Days of the relevant Redemption Date to get settled. The fund has kept a 3 months period for settlements as the fund may have unlisted securities in the portfolios such as Pre-IPOs but if the fund has availability of the cash during your redemption request and no planned investments, the settlement can happen much sooner
What is the biggest benefit of ‘Special Situation’ investing?
Investors can get extremely attractive ‘entry’ valuations due to various reasons like Forced Selling from institutions in Demergers, Value Discovery in Delistings, Following the smart money with Promoter Buying, Buying into ‘Promoter Change’ which results in tremendous improvement in Corporate Governance. Basically, Special Situations will help us to do Value Investing, in its purest form.
What they are looking for
- Most important: A ‘Double Special Situation’. Demerger followed by an Open Offer.
- Demergers, Open Offers.
- Promoter Change, Delistings, Rights Issues.
Risk Management
- Funds are deployed gradually, there is no rush to deploy, all at once. This way, they try their best to deal with near term volatility.
- Fresh ideas for new clients. Margin of Safety is significant for new clients. Hence, they try their best to avoid buying past ideas which may have run up a lot already
Effective ‘Communication’
Isn’t it essential that your Fund Manager be Virtually present for you? An industry first, Once you become a client of Negen PMS, your number will get added to a dedicated ‘WhatsApp Broadcast List’, managed directly by the Founder. So, that, if there are any portfolios related updates like, 1- A good time to add money on market dips, or 2- Portfolio companies related updates like Earnings growth or General updates, you will be updated in ‘real time’. Basically, Negen will be with you, all the way, in this great adventure ahead.
Special Situation Investment
Demerger listing
Conglomerate spins out non-core unit.
Usual Fund
Based selling emerges. Funds would rather not own the non-core or the small business due to regulatory reasons etc.
Stock most likely lists lower than Fair Value
We Buy, We Wait.
Make a Basket, Diversify and wait patiently for the thesis to play out.
Pre-IPO’s
Negen is actively searching for opportunities to invest in the Pre-IPO’s of Main board & SME listings, which allows our investors to participate in the growth potential of companies before they become publicly listed. By identifying promising companies at this growth stage, they aim to capture the value appreciation that may occur upon their listing.
Anchor Book
An anchor investor in an IPO is a qualified institutional buyer (QIB) which invests before the IPO is made available to the public as per SEBI regulations. As initial investors, they make the IPO process more attractive.
- Price Discovery
- Boosting Investor Confidence
- Offering Price Stability
Investors can participate in the anchor book and gain returns on listing through Negen AIF CAT 3
Other Investments
In addition to special situations, Pre IPOs, and anchor book investments, a Category III AIF may employ a range of other strategies. This may include investing in
- Listed Securities
- Alternative Assets
- Structured Products
- Hedging/Arbitrage
- Or any other strategy permitted under SEBI guidelines.
