Kings of Capital
Our financials sector focused investment strategy with a portfolio banks, NBFCs, life and general insurers, asset managers and brokers.
Overview
The key objective of our “Kings of Capital” strategy is to own a concentrated portfolio of high quality financial companies. Unlike the 2000s and 2010s, when banks and NBFCs were the only segment of financial services listed on the stock markets, the listed markets now offer a wide variety of high quality choices for investors in the BFSI sector. We therefore have the option to invest across banks, NBFCs, life insurers, general insurers, AMCs, capital market intermediaries, cash management companies, credit rating agencies and insurance intermediaries.
Portfolio Construction
The three tenets for selecting stocks in Kings of Capital remain the same as our our other strategies.
- Clean accounting and good corporate governance;
- Historical evidence of prudent capital allocation; and
- High barriers to entry so that companies are able to sustainably generate return on capital higher than cost of capital.
What we don’t like and generally avoid:
- Turnaround stories
- Lenders with extremely high leverage (generally in excess of 10x)
- Businesses with complex, difficult to understand business models
On the other hand, we like :
- Sustainable business models with low risk balance sheets (eg. private insurers, companies with strong free cash generation)
- Companies which demonstrate profitable market share gains (well run corporate backed NBFCs, select private banks)
- Competent management teams with a track record of shareholder value creation
- Companies with excess capital as they have room to make mistakes and to experiment
Fee Structure
Marcellus offers Kings of Capital PMS with ZERO entry load/exit load and with no lock-in. We offer two fee structures:
| Regular Plan | Direct Plan | |||||
|---|---|---|---|---|---|---|
| Fixes | Variable | Hurdle | Fixes | Variable | Hurdle | |
| Fixed only | 2.50% | 0% | NA | 2% | 0% | NA |
| Variable only | NA | NA | NA | NA | NA | NA |
| Hybrid | 1.50% | 15% | 10% | 1.25% | 15% | 10% |
* High water mark applies for performance fees Minimum investment: INR 50 lac
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