The investment objective of the fund is to achieve capital appreciation via a diversified portfolio of listed Indian equities. The fund’s constituent shares are issued by those Indian companies that Quantum believes will benefit from the long-term structural growth & development forecast for the Indian economy (by organisations like the International Monetary Fund & the World Bank).
Quantum Advisors is a multi-asset investment manager focused solely upon India.
Quantum has many years of experience as an Indian equity & fixed income investor, across multiple market cycles. Quantum now manages more than US$2bn in Indian equities for its clients via funds and segregated mandates.
Quantum was founded by Ajit Dayal in 1990, as India’s first equity research company.
Over the longer-term, Quantum seeks to provide consistent, positive returns for its clients by following a disciplined investment approach, coupled with diversification.
Such an approach is designed to avoid the dangers for investors that arise from either excessive valuations or an over-exposure to single-stocks or sectors.
Investors are attracted to India because of the higher levels of economic growth that the region offers.
However, Quantum is acutely aware that investors also assume an inherently higher level of risk when investing in India.
Quantum therefore believes that one of its most important responsibilities is the analysis, allocation and monitoring of investment risk.
Quantum utilises a bottom-up, value-biased investment process, believing that such an approach optimises the balance between risk and reward for its investors. Quantum views itself as an asset manager, not an asset gatherer – and seeks to build long-term relationships with its investors.
Quantum places a significant emphasis on its three corporate pillars of honesty, integrity and transparency in everything that it does.
India offers a multi-year investment story that demands a long-term investment time horizon.
Quantum correspondingly utilises a long-term investment process that has historically resulted in a portfolio turnover of around 20%, which suggests an average holding period per stock of approximately 5 years.
Quantum’s investment management process is driven by detailed fundamental research, which aims to identify value opportunities across the Indian equity market amongst companies that demonstrate strong fundamentals.
Quantum evaluates the business of the company, the environment in which it operates, the company’s management and the ability of that firm’s balance sheet and cash flow to support its longer-term goals. Quantum then assesses the valuation of the company based upon its fundamentals, with particular reference to its peer group (both locally and internationally), its history and the market in general.
Quantum will only ever buy a share if the prevailing market price is at least 40% below Quantum’s calculation of the company’s long-term intrinsic value.
Similarly, Quantum will sell a stock if the market price significantly exceeds that long-term value – or if there is a change of view with regards to the management of the company or the business environment in which the company operates.
Any portfolio that arises from this research driven process will be market-capitalisation and sector agnostic.
However, history demonstrates that at times of market stress, liquidity is of upmost importance when it comes to protecting capital values. The fund therefore only invests in companies that have an average daily trading volume of more than US$ 1m.
Quantum’s investible universe, therefore, mostly comprises those medium- to large-cap companies that are found in the broader BSE 200 Index.
The fund utilises a UCITS structure. The portfolio will aim to replicate the existing Q India Composite strategy, subject to any UCITS regulations.
A UCITS structure allows the fund to hold up to 20% in cash. Quantum is prepared to utilise such an allocation in the short-run if it sees Indian equity valuations as ‘irrationally exuberant’.
ACPI Investment Limited (ACPI IL) & ACPI Investment Management Limited (ACPI IM) are authorised and regulated respectively in the United Kingdom by the Financial Conduct Authority and in Jersey by the Jersey Financial Services Commission. This promotion has been approved by ACPI Investments Limited (FCA Register IRN 192403). Both companies are now part of Union Bancaire Privée.
Find out more at www.ubp.com.