Nine Rivers Small Cap Portfolio | PMS AIF WORLD | Bengaluru | 26 August 2023 | PMS AIF WORLD

TL;DR

Learn from Mr. Sandeep Daga, Managing Director and Chief Investment Officer at Nine Rivers Capital, about how to identify multi-bagger investment opportunities in the early stages of small cap investing.

Transcript

so moving on to the last session of the day uh the last session is um you know with Mr Sandeep Daga who is the managing director and chief investment officer at nine Rivers Capital Mr Daga is one of the veterans in the space of small cap investing and has been successfully managing a fund which has delivered a cagr upwards of 30 over the last 10 ye... Read More

Key Insights

• 👲 Nine Rivers Capital believes that a private equity approach is effective in generating superior returns in small cap investing.
• 👨‍🔬 They focus on investing for the long term and conducting in-depth research to identify undervalued opportunities.
• ❓ Nine Rivers Capital emphasizes the importance of buying growth at reasonable valuations and maintaining a concentrated portfolio.
• 👨‍💼 They actively engage with the businesses they invest in and closely monitor potential risks to their investment thesis.
• 🤩 Key factors they consider include market size, market structure, management track record, and cash flow generation.
• 💪 They prioritize companies with strong balance sheets, conservative management, and a focus on sustainability.
• 👲 Nine Rivers Capital expects the next decade to be a period of significant growth for small caps, driven by manufacturing, technology, and consumption sectors.

Questions & Answers

Q: What is Nine Rivers Capital's investment approach?

Nine Rivers Capital follows a private equity approach, investing in small cap stocks for the long term and conducting in-depth research before making investment decisions. They focus on buying growth opportunities at reasonable valuations and maintain a concentrated portfolio.

Q: How does Nine Rivers Capital identify investment opportunities?

Nine Rivers Capital looks for undervalued opportunities through their private equity approach. They go beyond historical analysis and conduct on-the-ground research to validate their investment thesis. They also build nuanced expertise in specific industry segments to stay on top of evolving trends.

Q: How does Nine Rivers Capital manage risk in small cap investing?

Nine Rivers Capital mitigates risk by investing in companies with robust balance sheets, conservative management, and a focus on generating healthy cash flows. They also closely monitor the companies they invest in and engage with their business ecosystems to stay informed about any potential risks.

Q: What are the key factors Nine Rivers Capital considers when evaluating companies for investment?

Nine Rivers Capital looks for companies with a large addressable market, preferably in an oligopolistic structure. They seek businesses with solid growth prospects, strong management track records, and operating leverage. They also prioritize companies with zero to low debt and healthy cash flows.

Key Insights:

• Nine Rivers Capital believes that a private equity approach is effective in generating superior returns in small cap investing.
• They focus on investing for the long term and conducting in-depth research to identify undervalued opportunities.
• Nine Rivers Capital emphasizes the importance of buying growth at reasonable valuations and maintaining a concentrated portfolio.
• They actively engage with the businesses they invest in and closely monitor potential risks to their investment thesis.
• Key factors they consider include market size, market structure, management track record, and cash flow generation.
• They prioritize companies with strong balance sheets, conservative management, and a focus on sustainability.
• Nine Rivers Capital expects the next decade to be a period of significant growth for small caps, driven by manufacturing, technology, and consumption sectors.
• Small caps can be volatile, but they provide opportunities for investors to buy high-potential companies at attractive valuations.

Summary & Key Takeaways

• Mr. Daga shares his experience as a successful small cap investor, achieving a CAGR of over 30% in the last 10 years.

• Nine Rivers Capital follows a private equity approach to create and manage their small cap portfolio, focusing on finding undervalued opportunities.

• The key elements of their investment approach include investing for the long term, conducting in-depth research, buying growth at reasonable valuations, and maintaining a concentrated portfolio.