Finance
Counter Cyclical Investments Diversified Long Term Value
About Us
- Counter-Cyclical Investments is Portfolio Management Service Provider, registered with SEBI vide Registration number INP000006554.
- We invest in small companies to generate big returns.
- Our expertise lies in spotting, evaluating & investing in promising small capitalization companies.
- Our experience has shown that a diversified portfolio of such small caps, with strong growth prospects, honest & competent management, bought at a significant discount to intrinsic value, held patiently & tracked constantly for changes in business fundamentals, generates market- beating returns over long periods of time.
- Over the years, our team has interacted with hundreds of management/promoters, which has enabled us to develop an in-depth understanding of their business, prospects & corporate governance.
- We are probably the only PMS which does not charge any upfront management fee from our investors. We only charge the performance fee after our investors make over 10% returns p.a. on their investment.
- Honestly & forthrightness is our policy.
Investment Philosophy
- We want to invest in companies with the following characteristics:
- Average Business @ deep discount or above average business @ moderate discount.
- Small companies with big market shares in niche sectors.
- Strong companies in cyclical downturn.
- EV/EBITDA < 5x & EV/OCF < 10x *[EV = Enterprise Value, EBITDA = Earnings before Interest, Tax, Depreciation & Amortisation ,OCF = Operating Cash Flow]
- Companies operating at low capacity utilization with strong orders expected to ramp up in the near future.
- Strong promoter track record of delivery & smart capital allocation.
- We generally stay away from Financials, Real Estate, Gems & Jewellery & Technology.
- Business insulated from technological disruption.
- Business with high value addition.
- Companies with very low or negative EV due to cash, investments or surplus real estate. Track record of volume & unit realization growth without debt and equity dilution.
- Companies operating at low or negative Working Capital.
- We avoid companies in tender business or where the company is unable to pass on increases in input prices to its customers.
- Businesses with low CAPEX requirements.
- Thinly traded counters with low volumes.
- Cos. doing regular share buybacks (which provides insurance in a bear market as the company would be able to take advantage of lower share price by extinguishing more shares via buyback thereby reducing share capital & increasing EPS permanently.)
- Cos. with change in management leading to improvement in efficiency & corporate governance.
- Unpopular, hated, hopeless, tainted (unfairly) cos.
- We generally avoid cos. with fixed price contracts or annual price reduction contracts with customers.
Performance
- Best performing fund for 3 years ending March 2024 with 58.95% CAGR.
- Amongst top 10 performing funds for 12 month period ending March 2024 with 53.73% returns.
Team
KESHAV GARG (Director):
- He is alumni of Fergusson College, Pune having experience of over a decade in the equity markets.
- He has in-depth knowledge of small-cap companies and has personally met with the management of hundreds of companies to date.
- He is responsible for the day-to-day operations of the company.
GUNIT SINGH NARANG (Principal officer):
- MA Economics from Delhi School of Economics (DSE)
- NISM certified
- Half decade experience in credit risk management & market research at American Express & Wells Fargo.
CA MAYUR SHRIKANT DESHPANDE (Advisor):
- Member of Institute of Chartered Accountants Of India.
- He has 11+ years of experience in corporate finance, fundraising & capital Markets.
- He was a vital member of investment banking division of ICICI Bank proprietor desk and credit research team in CRISIL in International Banking Sector.
MOHIT RATHI (Senior analyst):
- M.Sc. Wealth Management, Singapore Management University BA (Hons) Economics, Hindu College, Delhi University.
- Possesses in depth knowledge & experience in industrial processes & financial markets.
Fee Structure
- Fixed Fee & Charges: NIL
- No enrolling/ fixed fee
- Performance Fee:
- 0% on returns up till 10% p.a.
- 20% of returns in excess of 10% p.a.
To simplify
- Mr Kabir decides to invest INR 1 Crore with CCI
- He has to pay a fixed fee of INR 0 upon enrolling
- After 1 year, Kabir earns a return of 25% on his initial investment
- His portfolio is worth INR 1.25 Crore
- Mr Kabir is not charged any fee on his earnings of INR 10 lakhs (10% return is exempt of any fee)
- On earnings above INR 10 lakhs (10% return) i.e. INR
- 15 lakh (INR 25 lakh – INR 10 lakh), he is charged a performance fee of 20% on earnings i.e. 20% of 15 lakhs which is 3 Lakhs
- Total earnings of Mr Kabir after 1 year is 22 lakhs!