Ashoka India Equity Investment Trust
Launched in 2018, the Ashoka India Equity (AIE) trust aims to achieve long-term capital growth by investing in Indian companies of all sizes. The trust adopts a bottom-up stock-picking approach to target scalable businesses with sustainable superior returns on capital.
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Fund Manager
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Prashant co-founded the Investment Adviser and Investment Manager in June 2017 after 17 years in leadership roles at Goldman Sachs. He was the Chief Investment Officer (CIO) and Lead Portfolio Manager for the India Equity and Global Emerging Markets Equity strategies at Goldman Sachs Asset Management (GSAM) until 2017. He began his investing career in 1998 at State Street Global Advisors before moving to GSAM in 2000, where he held various senior roles, including Senior Portfolio Manager and Co-Chair of the Investment Committee. Prashant holds a BE in Mechanical Engineering from Mumbai University, an MBA in Finance from Vanderbilt University, and a CFA designation.
Prashant co-founded the Investment Adviser and Investment Manager in June 2017 after 17 years in leadership roles at Goldman Sachs. He was the Chief Investment Officer (CIO) and Lead Portfolio Manager for the India Equity and Global Emerging Markets Equity strategies at Goldman Sachs Asset Management (GSAM) until 2017. He began his investing career in 1998 at State Street Global Advisors before moving to GSAM in 2000, where he held various senior roles, including Senior Portfolio Manager and Co-Chair of the Investment Committee. Prashant holds a BE in Mechanical Engineering from Mumbai University, an MBA in Finance from Vanderbilt University, and a CFA designation.
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Investment process
The investment process on this multi-cap vehicle is centred around bottom-up stock selection, allowing the huge in-house research team at White Oak to scour the entire investment universe of some 750 companies to find well managed and scalable businesses with superior returns on capital and good governance, at a price that is at a discount to what the team see as its intrinsic value.
The initial universe of 750 companies is screened for factors like poor governance and other weak characteristics; as well as targeting firms which are alert to structural changes which can benefit their business. This brings the potential number of companies down to around 200 on which the team then do in-depth analysis. The team then target businesses they believe are attractively valued when building a final portfolio of 50-100 names.
Despite having a bottom-up focus, structural biases do come out of the process. For example, the team is unlikely to have large weightings in sectors like commodities, utilities, real estate and tobacco. This is because they are poorly governed, while being invested in heavily regulated state-owned enterprises can often limit growth.
The trust also invests into the mid and small-cap space, giving it exposure to a number of domestically-focused businesses.
The trust has a unique charging structure which is designed to increase the alignment of interest between investors and shareholders. The trust has no base management fee – meaning the team are only paid if the trust outperforms. The performance fee stands at 30% of the excess returns of the NAV per ordinary share and the MSCI India IMI benchmark (capped at 12% of NAV). The fee is also paid in shares to the team to ensure increased alignment of interests.
Risk
Investing in a single country portfolio always carries high risk, which can be accentuated in this trust, as it has a reasonable allocation in mid and small-sized companies, which are traditionally more volatile than larger companies. Performance is heavily tied to individual stock selection, however the team acknowledge the trust will lag when poor governance segments of the market in aggregate outperform (sectors such as commodities, energy, utilities, and tobacco outperform the market) government-owned companies outperform the market and when small and mid-caps underperform the market.
ESG
ESG - Integrated
The Company’s ESG framework is designed to evaluate ESG issues through three fundamental facets: policy, risk management and strategy. Companies are evaluated on their commitment to manage ESG issues effectively, as well as integrating ESG into their risk management process and on their approach to making ESG a strategic priority. For a business to be sustainable, the team believe its practices – including environmental, social and governance – must be sustainable for decades to come. Strong governance, a major issue for Indian companies, is a pre-requisite to cash flow assessment and shareholder value creation – companies can be screened out early in the process if they fail on this metric.
The information, data, analyses, and opinions contained herein (1) include the proprietary information of FundCalibre, (2) may not be copied or redistributed without prior permission, (3) do not constitute investment advice offered by FundCalibre, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a fund, and (5) are not warranted to be correct, complete, or accurate. FundCalibre shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, this information, data, analyses, or opinions or their use. The Elite Fund rating is subjective in nature and reflects FundCalibre’s current expectations of future events/behaviour as they relate to a particular fund. Because such events/behaviour may turn out to be different than expected, FundCalibre does not guarantee that a fund will perform in line with its FundCalibre benchmark. Likewise, the Elite Fund rating should not be seen as any sort of guarantee or assessment of the creditworthiness of a fund nor of its underlying securities and should not be used as the sole basis for making any investment decision. FundCalibre disclaims any responsibility for trading decisions, damages or other losses resulting from any use of the Elite Fund rating. All performance data, as well as fund size, OCF, AMC, annual income (historic), share price discount or premium, is sourced directly from FE Analytics, and will change periodically.