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Amid the massive volatility and weakness in the market, a small and micro-cap investment firm Equitree Capital has laid out the top four investment philosophies, which they follow and also believe that systematic investments ensure pragmatic growth and value creation.
The company is founded by professionals with hands-on entrepreneurial and investing experience across the private & public arenas, they seek to take a pragmatic “business-like” approach to invest, driving outsized returns.
Below are the four key pointers that Equitree Capital follows and recommends as Investment Philosophies:
Cherry-picking of companies: They broadly invest in companies whose business models that we can understand reasonably well. There is inherent & visible growth within the company. They generally look for businesses that are poised for 20% yoy growth over the next few years and have a strong or improving balance sheet.
Backing strong management teams: Clean & focused management is equally important as much as a good business. Equitree Capital spends considerable time in understanding management’s vision and priorities, and backs teams with a passion for scaling up businesses.
Reasonable Valuations: Equitree Capital is extremely conscious of the “value” that they pay to “buy” a business. They believe investing in the right business at the right value is half the battle won in the quest for wealth creation.
Long-term holdings: They believe in staying invested as long as the growth is visible, valuation stays reasonable and there are no other structural issues with the investment.
The company invests in small and micro-cap companies focused where the market cap is between Rs 500 crore to 3000 crore.The investment company prefer to invest in companies that are under research by the markets and under-invested by institutional investors. This enables them to capture some kind of ‘discovery premium’ as these companies mature and get on the institutional investor’s radar.
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