Marcellus

Marcellus Little Champs PMS Portfolio (LCP)

KEY PORTFOLIO ATTRIBUTES #

Year of Inception 29-Aug-2019
Number of Stocks 26
Alpha (1Y) -69.13%
Beta (1Y) 0.56

About Marcellus Investment Managers Portfolio

At Marcellus, the purpose is to influence efficient capital allocation in the Indian economy. Marcellus does this by channeling household savings towards high-quality companies with long track records of efficient capital allocation, who in turn deliver superior returns to savers.

Key People

Mr. Saurabh Mukherjea
Mr. Saurabh Mukherjea Founder & CIO
Mr. Ashvin Shetty
Mr. Ashvin Shetty Portfolio Manager

Investment Objective

Marcellus Little Champs PMS aims to identity small-cap companies (Market cap <US$500 Million or approx. 3500 Cr) with an excellent corporate governance and capital allocation track record and strong sustainable competitive advantages built around brands, business processes and strategic asset.

Investment Strategy

Marcellus Little Champs Portfolio or Marcellus LCP PMS follows a thorough analysis based on two objective steps as mentioned below :

• Marcellus LCP follows an objective analysis based on 12 accounting ratios covering income statement (revenue/ earnings manipulation), balance sheet (correct representation of assets/liabilities), cash pilferage and audit quality checks.

• Marcellus Little Champs Portfolio or Marcellus LCP PMS bets on the First rank stocks on each of the 12 ratios individually. These ranks then cumulated across parameters to give a final pecking order on accounting quality for stocks.

Marcellus Little Champs LCP PMS then picks companies from the filtered universe after interaction with industry players, competition, channel partners etc.

Investment Philosophy

The 3 attributes for selecting stocks in Little Champs remain the same as in Consistent Compounders strategy:

1) Clean accounting and good corporate governance;
2) Historical evidence of prudent capital allocation; and
3) High barriers to entry so that companies are able to sustainably generate return on capital higher than cost of capital.

At Marcellus, the Purpose is to make wealth creation simple and accessible by being trustworthy and transparent capital allocators.

The investment philosophy at Marcellus has evolved from the ideas of Kirby and Thiel, which they have refined further.

The investing approach has 3 pillars:

Clean Accounts: They have quantitative frameworks which use a combination of forensic accounting and capital allocation assessment define our investible universe.

Capital Allocation: They look for companies with superior track record of capital allocation – companies that generate free cash flows and reinvest them in the business to fuel further growth.

Competitive Advantage: The experienced investment team through in-depth primary research, constructs a portfolio of companies with deep competitive moats.

These companies are then held on for long periods of time with little or no churn, which allows them to capture the benefits of long-term compounding and deliver superior returns.

Why Marcellus LCP?

Marcellus Little Champs Portfolio or Marcellus LCP PMS is a small-cap focused strategy.

On an average over the last ten years, about ~50 stocks have entered/exited BSE 500 every year indicating a high degree of churn. A stock entering the BSE 500 tends to significantly outperform the Index in the years preceding the inclusion.

The aim is to identify such stocks and capture the strong performance as much as possible.

Awards & Achievements

• In 2021, Marcellus’ Consistent Compounders Portfolio or Marcellus CCP was awarded Rank #2 as the Best Newcomer PMS across all categories, on a 2Y Absolute Returns Basis. These Awards were hosted by PMS AIF WORLD, in association with IIM-Ahmedabad.

• In 2021, Marcellus’ Little Champs Portfolio or Marcellus LCP was awarded Rank #2 as the Best Newcomer PMS across all categories, on a 1Y Absolute Returns Basis. These Awards were hosted by PMS AIF WORLD, in association with IIM-Ahmedabad.

Performance Table #


Trailing Returns (%) 1m return 3m return 6m return 1y return 2y return 3y return 5y return 10y return Since inception return
Marcellus Investment Managers Little Champs-4.24%-2.05%-1.60%4.05%-4.51%-1.83%--14.72%
BSE 500 TRI0.83%5.19%17.75%34.70%23.27%18.07%--21.08%

QRC Report Card *




VIEW DETAILED QUALITY, RISK, CONSISTENCY ANALYSIS

Portfolio Holdings


Holding %
GMM Pfaudler Ltd. 7.00
Mold-Tek Packaging Ltd. 6.00
MAS Financial Services Ltd. 5.50
Alkyl Amines Chemicals Ltd. 5.00
Vijaya Diagnostic Centre Ltd 5.00
Garware Technical Fibres Ltd. 4.50
Ultramarine & Pigments Ltd. 4.50
Aavas Financiers Ltd. 4.50
Tarsons Products Ltd. 4.00
Fine Organic Industries Ltd. 4.00

Sector Allocation


Holding %
Chemicals 24.00
Consumer Discretionary 7.00
Financial Services 21.00
Light Industrials 19.50
Pharma & Healthcare 16.50
Auto Components 6.00
Capital Goods & Industrials 3.00
Building Materials 3.00
Cash 1.00

Market Cap Allocation


Allocations %
Large Cap 0.00
Mid Cap 0.00
Small Cap 96.00
Cash 4.00

Do Not Simply Invest, Make Informed Decisions

WISH TO MAKE INFORMED INVESTMENTS FOR LONG TERM WEALTH CREATION

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From the Founders & Managers of Marcellus Investment Managers PMS

What to expect from Marcellus’ Little Champs PMS?

The key objective of the Little Champs PMS is to identify and invest in small cap companies with clean management, good capital allocation track record and dominance with strong entry barriers. While we intend to fill our portfolio with winners, we want to be sure of staying away from dubious names where we are not convinced about the cleanliness of accounts or the integrity of the promoters (even though the business potential may sound promising) as the fruits of company’s performance may not get shared with minority shareholders. We intend to not only benefit from the earnings growth of these companies but also from potential valuation rerating as these ‘undiscovered’ names (due to their small size and liquidity) come in the limelight in next few years as they keep on compounding their earnings.

Who should invest in this PMS?

An investor with a time horizon of 3-5 years who want to invest in high quality small-cap companies with an expected long-term compounding of 25-30% should invest in this PMS

Which is the best company through which an investor can invest in Marcellus Little Champs PMS Portfolio (LCP)?

We recommend PMS AIF WORLD, because, it is one unique platform that offers real knowledge driven investing with their highly meaningful data, reports, and content that is written very well. PMS AIF World is a team of highly articulate, educated, and experienced people.

Disclaimer

#Returns as of 31 May 2024. Returns up to 1 Year are absolute, above 1 Year are CAGR.

*QRC Report Card data is updated quarterly. Current data is as of Mar 24.


Do Not Simply Invest, Make Informed Decisions

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