Porinju Veliyath’s success as a stock picker and status of “wealth wizard” means that investors are chasing him with bagfuls of money. Porinju has racked up a mammoth AUM of Rs. 220 crore for “Equity Intelligence”, his Portfolio Management Scheme (PMS).
Porinju made this disclosure in his latest interview to CNBC TV18. Porinju also revealed that Equity Intelligence has notched up returns of 71.69 percent in the fiscal year 2015, which compares very favourably to the 26.66 percent gain for the Nifty. He also disclosed that over the past 12 years, Equity Intelligence has earned impressive gains of 32.9 percent CAGR.
It is interesting to note that in an interview to the microcapclub, Prof. Sanjay Bakshi also revealed important facts about the ValueQuest India Moat Fund that he manages. The Prof did not indicate the AUM but said that the “weighted average market cap” of the stocks in the portfolio is about $600 million (Rs. 4000 crore). He also revealed that there are 11 stocks in the portfolio. These must be small and mid-cap companies.
My guess is that unlike the Moat Fund’s concentrated portfolio of 11 stocks, Porinju’s Equity Intelligence PMS must have a highly diversified portfolio with several dozens of stocks in it. Porinju once revealed that when you are buying “low-quality” stocks, you have to spread your risks across a large number of stocks so that the failure of a couple of them does not cripple the AUM.
Prof. Sanjay Bakshi also has an impressive track record of generating returns. While the ValueQuest India Moat Fund notched up a return of 108% from April 2014 to May 2015 (Nifty return is 15%), the Prof has delivered 24% (in USD) from 2001 to 2012.
The Prof also revealed that the ValueQuest India Moat Fund earns a management fee of 1% and a performance fee of 20% over a hurdle of 8%. Porinju has not revealed the fee that his PMS charges. However, according to an old prospectus, there are three fee structures that a client can opt for. At the lowest rung, the fee is 1% on the average NAV plus a 20% share of the returns above 10% p.a.
The investing style of the two stock pickers is as different as chalk is from cheese. While Porinju goes hunting for “cheap” and low P/E stocks that are in a poor shape and with “low quality management”, the Prof does not touch a stock if it doesn’t have top-quality management, high ROE, a “moat” and other “high quality” parameters. The Prof is happy to pay a high P/E for these stocks.
At the end of the day, notwithstanding the difference in investing styles, both stalwarts are raking in big bucks of money.
And that is all that matters!