Negen Capital Special Situations & Technology Fund

Negen Capital Special Situations & Technology Fund is led by Neil Bahal, a specialist in the niche strategy of special situations investing. Neil began investing at the age of 15 and has over 25 years of experience in capital markets. His deep understanding of market cycles and ability to identify inflection points in companies makes him one of the few fund managers in India focused solely on this style of investing.

Special situations investing is centered around events that can significantly alter a company’s valuation—such as demergers, promoter changes, or strategic shifts. Neil’s track record in spotting these opportunities has been impressive. For instance, Negen invested in KPIT Tech after its demerger from KPIT Engineering Services in 2020 when the stock was just ₹60. It went on to touch ₹1,900 by 2024. Similarly, they entered Max Healthcare after KKR’s takeover, which turned out to be a multi-bagger. CG Power was another well-timed call, and more recently, they’ve taken a position in Manappuram Finance following Bain Capital’s entry.

The investment philosophy is built on two key pillars. First is value with a trigger—identifying fundamentally strong companies that are undervalued but also have a clear catalyst for re-rating. Second is a long-term bet on the technology megatrend. Neil believes India is at the cusp of a structural tech boom—not just in platform-based businesses but also in IT services and product companies. These businesses typically exhibit zero debt, high RoIC, strong free cash flows, and consistent earnings growth.

The portfolio is heavily skewed towards mid and small caps, with 80–100% allocation in this space and a maximum of 20% in large caps. This is because true special situations and value unlocking opportunities are more prevalent in the mid and small-cap universe. The construct is concentrated and built for investors who are looking for differentiated strategies beyond conventional equity investing.

Neil draws parallels to global examples like Warren Buffett’s original investment in Berkshire Hathaway, which was itself a special situation with a management change, and Indian stories like the Adani Group, where value has been unlocked through strategic demergers. These examples reflect how powerful the strategy can be when executed with discipline.

The minimum investment required in this fund is ₹50 lakhs. Given the concentrated and contrarian nature of the portfolio, it is best suited for investors willing to be patient and ride through market cycles in pursuit of long-term, outsized returns.

Enclosing a webinar done with the fund manager – PMS AIF WORLD x Negen

Negen Capital’s Special Situations & Technology Fund is predominantly a smallcap and midcap focused PMS with a keen interest in identifying value investing opportunities via special situations like demergers and Spin offs.

The objective of Negen Capital Special Situations PMS is to create consistent profits for clients in all market conditions, through values of professionalism, transparency, and safety.

The belief is to aim at Sustainable Value Creation Via Growth Investing & Special Situation Investing.

• Strategic risk management:

1. Negen Capital has been following a conservative approach due to covid, which means company has been keeping cash as well for the uncertainties, the company has kept 4.19% cash and generated alpha returns with 95.81% Investment.
2. Negen Capital takes less risk by avoiding cyclicals, commodities and PSUs.
3. Negen Capital sticks to Technology, IT, Demergers and Promoter change.

• Negen Capital Special Situations is uniquely placed:

1. Special Situations: Value investing with a trigger
   1. Demergers
   2. Change in promoters
2. Technology: A permanent super-cycle
   1. Indian Tech
   2. Global Tech (FAANG plus)

• Negen Capital Special Situations PMS is Tech-focused:

1. The internet adds 3 new users EVERY SECOND.
2. 15 smartphones are sold globally EVERY SECOND
3. Due to Jio, India has seen ‘Internet-i-fication’.
4. We are in the midst of an early technology revolution in India
5. A technology super cycle is in front of our eyes
6. Every single decent sized business is going to upgrade its IT infrastructure in the next few years
7. Pure technology platforms and even the IT product & services companies should see unprecedented, structural growth.
8. These companies are typically debt free, have high RoIC, high FCF, and best of all, they have Growth.

• Value Investing:

1. Negen PMS does not buy random, cheap stocks from market. These kinds of stocks are cheap for good reasons.
2. Negen PMS buys buy Cheap stocks only if they demerge or if a new promoter buys the company to create value

In 2022, Negen Capital Special Situations & Technology Fund was awarded Rank#1 in the Best PMS across all Categories, on 1Y of Risk-Adjusted Returns. These Awards were hosted by PMS AIF WORLD, in association with IIM-Ahmedabad.