Your Laureate is predominantly betting on small- and mid-cap stocks? Given the sharp correction in that space during the last six to eight months, How is it performing?

Yes, we bet mainly on small- and mid-caps as we believe the segment offers a lot of scope for above-average returns over the medium to long term. Such companies are usually under-owned and under-researched, giving us an opportunity to bet on them. Our strategy returns for one year were around 17 per cent (Nifty Smallcap 250 up 11 per cent), while the last six months were -16 per cent (Nifty Smallcap 250 was -18 per cent). Equity markets over the last three months have been very choppy, predominantly due to the risk of imposition of tariffs by the US. There has been uncertainty regarding tariffs, leading to heightened volatility in equity markets globally.

How do you balance the risk? Do you see any redemption pressure?

We reduce risk in the portfolio by following a consistent framework. Our portfolio companies usually have characteristics such as growth, fundamentals and management quality, which help us reducing risk. Further, we have limits on maximum weights on individual stocks and sectors and book profits in a timely manner when valuation parameters are met without being influenced by market momentum. We also avoid sectors we do not understand and stay away from short-term trends and narrative-driven sectors. 

Post correction, do you see value in that space especially given the turbulence both at macro and micro levels?

Valuations have come to attractive levels during this ongoing correction. We may get good opportunities in the coming days in the small- and mid-cap space, where substantial returns can be generated from a medium-to-long-term perspective. Tariff war, however, poses the threat of a global slowdown, and thus there may likely be pressure on the small- and mid-cap space till the dust settles and clarity emerges. 

With SEBI having approved for SIF (Specialised Investment Fund), what impact do you see on PMS’ market share?

We have recently received SEBI approval for CAT-III AIF. The AIF will largely follow a strategy similar to Laureate. AIF will further have opportunities to invest in QIP, Pre IPO and unlisted opportunities. Some of the clients from PMS may shift to the AIF, but AIF will also target a completely new set of investors. 

Your other strategies, SCALE and NOVOGRAM, have given negative returns. What are the major reasons for weak performance?

Scale and Novogram strategies were started very recently. As we know, over the last few months, markets have been extremely uncertain and volatile, and hence both schemes have negative performance. These schemes will scale up over the next few months and we are hopeful of a reasonably good performance over medium to long term. 

What is the size of funds managed?

Total funds managed under all strategies is ₹700 crore.