Prateek has instituted a new portfolio framework for allfunds including capping large exposures to 10% with an intent to bring thisdown to 8%, eliminating long tails with a minimum of 2% weightage in anyposition, all portfolios to have 20-30 stocks thus achieving adequatediversification while retaining large high conviction bets, becoming more indexaware, instituted stop losses to eliminate clinging onto ideas that are notworking and articulation of key themes that the house is bullish on with FMshaving leeway to choose stocks withing these themes.
All these measures are aimed at continuing to nurture the vibrantidea generation and alpha creation ethos while encapsulating a risk frameworkto ensure consistency of performance.
The new framework is highly scalable – at 3x current AuM, notweaks will be required, at 5x AuM, some tweaks will be required in the smallcap space and at 10x AuM, some tweaks may be required in the midcaps space.Prateek does not see any challenges managing at least 5x the current AuM withthe new frameworks in place.
In FY23, 80% of MOAMC’s equity funds delivered alpha –putting the fund house in 2nd position in the industry on alphadelivery.
The fund house aims to be the best player in the highgrowth/ high quality space – a position it has achieved in FY23 and aims to retaingoing forward.
Prateek says MFDs should ideally choose 4 fund houses fortheir clients’ equity portfolios – two with value orientation and two withgrowth/quality orientation.
He asks MFDs to give MOAMC 25% allocation of client equityportfolios – assuming they allocate 50% to growth/quality and MOAMC gets halfthat allocation.
MOAMC’s equity portfolios are distinctively different fromothers as the firm is unafraid to make sizeable bets in high conviction midcaps– which often do not feature in peer funds’ top 10 names. This gives an addedlevel of diversification for investor portfolios.
With interest rate hikes peaking, growth style will now gettailwinds. Key themes Prateek is bullish on include hospitals, diagnostics,defence and chemicals.