India's Top AIF & PMS Investment Consultant

Centrum Good to Great

About Company

Centrum PMS is rebuilding following the departure of its previous CIO. While they have employed a senior resource (Anil Sarin) to help build the business, he recently arrived in 2018, and it may take some time for Centrum to establish itself as a stronger PMS competitor. Another aspect we dislike is the fact that there are too many diverse tactics for a tiny fund company. Their execution and skill in concentrated mid- and small-cap strategies based on their research methodology, on the other hand, are quite good.

Fund Snapshot

Year of Inception 2019
Number of Stocks 20
Investment Horizon NA
Fund Managers Abhishek Anand

Unique Feature

Quality picks from mid and small-cap

Investment Philosophy

  • To gain substantial long-term outperformance by investing in high-quality mid- and small-cap firms.

EDGE Framework

  • Earnings Growth (E): driven by criteria such as minimum ~15% EBITDA growth and ~15% ROCE | High cash to EBITDA ratio (65% and above) | Low leverage (<2x)
  • Deep Dive Research (D): driven by factors like the size of the opportunity, competitive advantage, scalability, and channel checks
  • Governance (G): evaluated based on accounting quality, past capital allocation, past related party transactions, and dividend policy
  • Execution (E): past track record and promise vs delivery historically

The above-mentioned EDGE framework is used to identify leaders.

Leadership traits are defined as

  • Market Share
  • Promoter/Management Pedigree
  • Operating Margins and Return Ratios
  • Brand/Distribution Strength
  • Business Growth and Pricing Power
  • R&D and Technology Differentiators