Marcellus

Marcellus Rising Giants PMS

KEY PORTFOLIO ATTRIBUTES #

Year of Inception 27-12-2021
Number of Stocks 25
Alpha (1Y)
Beta (1Y)

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

High quality mid-sized companies have been amongst the largest wealth creators in Indian equities and Marcellus Rising Giants Portfolio is a portfolio focused in this space of quality mid caps companies in India in the USD 500m – 10 bn market cap range.

Investment Strategy

Marcellus Rising Giants PMS is a Concentrated 15-stock portfolios with the top 4 stocks accounting for around 40% of the portfolio. The next 5 (sizing ranks 5-10) stocks in Marcellus Rising Giants account for ~30% of the portfolio. Sizing ranks 11-15 account for the final 29% of the portfolio. Sizing in Marcellus Rising Giants is based on Longevity framework and forward EPS expectation of analysts.

 

For mid cap stock selection, by Marcellus Rising Giants, the basis of scoring is on ‘Longevity’ (moats, lethargy, succession planning) and EPS growth prospects. And for For small caps stock selection Marcellus Rising Giants follows a ‘Discovery’ framework i.e. growth accompanied by improving profitability and improving FCF thanks to barriers to entry.

 

Seven out of 15 Stocks in Marcellus Rising Giants are Aavas Financiers, Page Industries, L&T Technology Services, Info Edge, Dr Lal Path Labs, GMM pfaudler, Relaxo Footware.

Investment Philosophy

Marcellus Rising Giants PMS philosophy has its roots in the Marcellus’ Asset Managers Core Investment philosophy : –

Clean accounts and governance.

Strongly moated dominant companies in niche segments not yet well discovered by the market participants.

Strong track record of capital allocation with high reinvestment in the core business and continuous focus on adjacencies for growth.

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' Rising Giants PMS?

Marcellus Rising Giants PMS intends to identify and invest in high quality mid-sized companies (typically less than INR 75bn market-capitalisation, predominantly in the INR 7 to 75bn range).

High quality mid-sized companies have been amongst the biggest wealth creators in Indian equities over the last 3, 5 and 10 years.

From a universe of ~450 companies in this segment, a portfolio is constructed of 15-20 companies which make it past Marcellus’ proprietary forensic accounting & capital allocation filters as well as our bottom-up stock selection & position sizing framework.

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 Rising Giants0.41%4.56%2.67%11.51%4.12%----5.40%
BSE 500 TRI0.83%5.19%17.75%34.70%23.27%---17.44%

Portfolio Holdings


Holding %
GMM Pfaudler Ltd. 7.50
Divi's Laboratories Ltd. 6.00
Alkyl Amines Chemicals Ltd. 5.00
Eicher Motors Ltd. 5.00
SKF India Limited 5.00
Info Edge (India) Ltd. 4.50
L&T Technology Services Ltd. 4.50
Aavas Financiers Ltd. 4.00
Suprajit Engineering Ltd. 4.00
Cholamandalam Investment and Finance Company Ltd. 4.00

Sector Allocation


Holding %
Auto & Auto Components 8.00
BFSI 15.50
Building Materials 3.50
Chemicals 14.00
Consumer Discretionary 14.50
Health Care 9.00
Industrials 16.50
IT Services 14.00
Pharma & Health-Care 4.00
Cash 1.00

Market Cap Allocation


Allocations %
Large Cap 16.00
Mid Cap 39.00
Small Cap 37.50
Cash 7.50

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’ Rising Giants PMS?

This PMS intends to invest primarily in high quality mid-sized companies (less than INR75,000 crores market-capitalisation, predominantly in the INR 7,000 crores – INR 75,000 crores range) with: 1) Well moated dominant franchises in niche segments; 2) A track record of prudent capital allocation with high reinvestment in the core business and continuous focus on adjacencies for growth; and 3) Clean accounts and impeccable corporate governance. Besides the earnings growth from market share consolidation in favour of Rising Giants companies and capital allocation initiatives of these companies, we also expect to benefit from free cash compounding as these operating profits of these companies grow faster than reinvestments (working capital and fixed assets investments).

Who should invest in this PMS?

An investor with a time horizon of 3-5 years who want to invest in high quality mid-cap companies with an expected long-term compounding of 20-25% should invest in this PMS

Which is the best company through which an investor can invest in Marcellus Rising Giants PMS?

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.


Do Not Simply Invest, Make Informed Decisions

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