WhiteOak Capital Mutual Fund was launched on July 7, with the fund house announcing its first fund launch of a flexicap fund.
The WhiteOak Capital Group received SEBI approval for its acquisition of Yes MF towards end of last year, and subsequently the fund house was renamed as WhiteOak Capital Mutual Fund.
The fund house was founded by Prashant Khemka, former CIO and lead portfolio manager of GS India equity and global emerging markets, at Goldman Sachs Asset Management.
As Moneycontrol reported, WhiteOak Capital MF would be one of the few mutual funds in the industry that will stick to active fund management.
WhiteOak Capital already has a track-record of investing in Indian stock markets and managing assets for different class of investors. It manages Indian equity investments for foreign investors through its offshore funds, as well as for domestic investors through its PMS and AIF products.
"Collectively, WhiteOak Capital manages approximately Rs 41,000 crore of investor assets," points out Aashish Somaiyaa, Executive Director and Chief Executive Officer, WhiteOak Capital MF .
At a later point, the fund house also plans to launch a global emerging markets fund for Indian investors. This particular scheme will be first-of-its-kind in the sense that it will be actively-managed by the investment team of a domestic fund house. WhiteOak Capital has recently launched such a fund in its offshore platform. A team based out of Singapore manages funds launched in offshore markets by White Oak Capital.
An international mutual fund scheme can be only launched in India after overseas investing limits are enhanced.
Investment Process
WhiteOak Capital MF will follow a strict bottom-up investment approach. Ramesh Mantri, CIO, WhiteOak Capital MF said the focus is on identifying good businesses at right pricing and not get influenced by macro-economic variables.
Rather than taking sector rotation calls or macro calls, the fund house will look at building a portfolio that balanced between pro-cyclical businesses and defensives.
Mantri pointed out that the fund house doesn’t follow the widely-used valuation ratios – the price-to-earnings or price-to-book ratio – to identify investment ideas.
“We have our own proprietary investment framework (OpCo-FinCo) that involves splitting the business into two parts - as a financing company and operating company,” he said.
“The financing company owns all the capital that is deployed in the business. The operating company does not own any assets in the business. So, it is entirely capital light. The operating company pays an operating fees and financing costs to financing company to use the assets and the working capital,” Mantri said.
“The business is assessed on what remains after paying out operating fees and financing costs (assumed 11 percent in-line with long-term expected equity returns),” Mantri added.
