Renaissance Alpha Portfolio – Multicap Fund

The investment objective of Renaissance Alpha Portfolio – Multicap Fund is to create long term capital appreciation by a balance and right mix of Large, Mid and Small Cap stocks.

The investment strategy of Renaissance Alpha Portfolio – Multicap Fund is that the portfolio focuses on superior absolute returns over the investment horizon of 3-5 years with low risk, high quality growth stocks which delivers superior risk adjusted returns over the medium to long term.

Renaissance Alpha Portfolio – Multicap Fund’s strategy has the following attributes:

• Concentrated portfolio of 20-25 stocks.
• Focus on generating absolute returns over a 3 – 5 year period
• Market cap of more than INR 3000 Cr
• Capitalization Agnostic
• Additional layers apart from our SQGARP frame of low leverage (less than 0.5) and ROE>15%

The 4 Pillars of Investment are:

• Philosophy
• Process
• People
• Performance

Alpha Stock Selection Process

• Size
  • Business Leadership
  • Companies with Market Capitalization >3000cr
• Quality
  • Companies having ROE >15%
  • FCF positive
  • Good quality and competent management teams
• Growth
  • PAT growth of 15-20% over next five years
• Risk
  • Reasonable Margin of Safety
  • Debt/Equity < 0.5

The investment philosophy of Renaissance Alpha Portfolio – Multicap Fund is that it is focused on investing into Quality business that can deliver sustainable high growth over medium term to long term and being selective in cyclical business while keeping Risk Management central to investment management.

Renaissance Alpha Portfolio – Multicap Fund follows Sustainable Quality Growth at Reasonable Prices (SQGARP):

• Sustainability: Companies with sustainable and durable business models
• Quality: Superior quality businesses as demonstrated by competitive edge, pricing power, ROE, FCF, good quality and competent management teams, and so on
• Growth: Businesses that can deliver superior growth over medium to long term
• Price: Ability to invest at reasonable valuations. Fair value approach to valuations, with a focus on the economic value of business.