CXOToday has engaged in an exclusive interview withPrashasta Seth – CEO, Prudent Investment Managers LLP
1- Can you tell us a little about your business, its area of expertise, and the services you offer?
We are a niche asset management business formed with the aim of providing best risk adjusted returns for our clients. We cover the entire spectrum of investment opportunities of clients from fixed income to listed equities and unlisted equities. However, as a firm we are more focussed on equites rather than fixed income. On the equities side we provide an entire range of opportunities to the clients right from early stage to pre ipo to listed equities. Currently we have a PMS structure in place and over the next couple of months we will be providing the AIF structure as well for the clients
2- What are the goals and mission of your business? Could you also share a brief overview of your journey since the company’s inception?
Our goal is to ensure the best risk adjusted returns for the clients. As a business we are very risk averse and thus our first aim is to ensure that there is no permanent loss of capital to our clients. Once we have managed try we are looking to provide 15%-18% returns on the listed equity side and 25%+ CAGR returns on the unlisted side.
As a business we are looking to partner with clients who share our vision and philosophy. As a result, we have grown entirely through direct connects and references. We haven’t gone through the common route of distributors etc as we think ours is a trust business and there shouldn’t be any gaps in our understanding and that of our clients
We started the company in early 2021 and got our PMS license in end 2021 and started onboarding clients in March 2022. We have now grown to AUM of close to 750 crs and we work with 30-35 families
3- What sets your business apart from competitors? What do you consider your most distinctive quality?
As stated above we are very focussed on capital preservation. Consequently, we are more focussed on generating absolute returns for our clients rather than the relative return philosophy which most of the industry operates at. Our portfolios are very different from what a traditional PMS / MF portfolio looks like which ensures diversification for our clients.
On the unlisted side we have pioneered by bringing the private equity approach to early-stage investing. We focus a lot more on unit economics, profitability than most other investors at that stage. Partly it stems from our philosophy of preserving capital first and then chasing returns. This entails that we might miss on 100 baggers but at the same time we will also not see write-offs in our portfolio companies
Another thing we are very proud of is that our clients know us very well and there is no disconnect between us in terms of expectations resulting in a superior journey experience for our clients
4- How do technology and Big Data enable Prudent investment managers to deliver their services effectively?
There are two aspects in which technology and big data plays a pivotal role for us
- Research – We use big data to identify the current trends and which companies are likely to benefit from the same. This enables us to provide higher returns to our clients
- Transparency – As indicated earlier our business is based on trust. Thus, it’s very important for us to be fully transparent to our clients. Our clients can see their portfolio at any point from any part of the world
5- What kind of startups have you invested in so far? Have there been any tech startups? If yes, could you name a few?
We have invested in startups across the entire spectrum. Our investments have been in field like Artificial Intelligence, Fintech, Visualisation Tech, HR Tech. Our investments have had some bit of tech element in the same as we think that any new company needs to offer a differentiation to the existing companies and tech could be the most disruptive differentiator. As a fund house we are looking for companies that can build the next big and profitable business rather than look for companies which could be part of the next big wave.
Few of our investments are – Flipspaces, Snapmint, HR One, Intellimation. AI and Money club
6- What initial and ongoing challenges have you faced, and how did you overcome them? Did you experience resistance from clients or funders in this context?
We are lucky that we haven’t faced any significant challenges till now. We have got love and respect from our clients, employees and companies. We have been able to hire the right talent from freshers to experienced people. We have clients who have been supportive for us through the entire journey. Even in our start up investments we have got a lot of respect from the founders who have even allocated the investment for us (in an oversubscription scenario) after seeing our differentiated approach and the value addition that we can provide.
7- What sort of marketing challenges have you encountered?
Frankly we aren’t a marketing driven organisation. In fact, we don’t have any sales person in the organisation as we are looking to have a calibrated growth driven by references and connections. So luckily for us those challenges haven’t arrived
8- What aspirations do you have for your business’s growth in the upcoming year?
We aren’t into yearly targets as we believe that ours isn’t a secular business in some sense. There are some years where you have to be aggressive because the markets is giving you great opportunities to invest. Similarly, there would be years where you would like to take it slow as there aren’t enough opportunities
Having said that over the next 12 months we are looking to launch our Cat II and CAT III AIFs as there has been a lot of push from our clients for these products.
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