ETMarkets PMS Talk: This 600-cr fund manager focuses on price value gaps to identify stocks for portfolio & manage risk

“Risk management is embedded in our Investment Process. By focusing on price-value gaps, we strive to achieve a balance between risk and reward," Tridip Pathak, Executive Director and Portfolio Manager at Avendus Olivo PMS.

In an interview with ETMarkets, Pathak said: “We have an investment process which helps us identify opportunities from our ~145 stock coverage universe at any point in time,” Edited excerpts:

Thanks for being part of the segment. You are managing over 600 cr in AUM – please take us through the portfolio performance?
As of today, our PMS Strategy has delivered ‘on an aggregate basis’ a CAGR return of 21.7% since inception in August 2020, 19.8% over the last 3 years, 13.7% over the last 2 years and 28.4% over the last 1 year.

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Our aggregate portfolio has outperformed the benchmark BSE 500 TR index across 1yr, 2 yr and 3 yr horizons. There is a lag on a since inception basis mainly because we follow a Separately Managed Account (SMA) practice and because the platform has been ramping up from a small and growing base in 2020 in a rising market.

When we say that it is a SMA – what does it actually mean? What is the ideal time horizon in which one should be investing?
Ours is a Separately Managed Account (SMA) practice, which we believe is the original avatar of PMS. We do not follow the model portfolio approach.

As money comes in from a client, we create a portfolio based on available opportunities at that point in time.

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