Should you invest in 'Emkay Emerging Stars Fund'?

Emkay Investment Managers Ltd (EIML), the asset management arm of Emkay Global Financial Services Ltd, today announced the launch of the fourth series of its award-winning Category III Alternative Investment Fund (AIF), dubbed the ‘Emkay Emerging Stars Fund’. EIML’s latest fund aims to raise Rs 500 crores. A seasoned team led by Fund Manager Sachin Shah will manage the fund.

The fourth series was launched in response to popular demand following the fund’s good performance in its first three series.

That said, series I and II of the AIF have given over 14% compounded annual growth rate (CAGR) returns since inception, AIF III has delivered over 20% CAGR returns, as of 30th June, 2021. The returns for all previous series have been over 110% for the past one year (CAGR).

Management views

The fund’s investment objective is to provide investors with long-term capital appreciation through a portfolio of equities and equity-related assets.

Emkay Emerging Stars Fund Series-IV will invest in 20-25 emerging firms, primarily in the small-cap category, that have a favourable cash flow forecast or track record, a strong balance sheet, business scalability, intrinsic profitability, and purchase price discipline.

“We see tremendous opportunities for growth in the mid and small-cap companies. Our experienced investment team, backed by a robust research division and a time-tested investment strategy, will help us to create meaningful alpha for our clients,” said Sachin Shah, Fund Manager, Emkay Investment Managers.

What should investors know?

As with its predecessors, the fourth series of the fund will be bolstered by E-Qual, EIML’s unique governance structure that examines each firm on a variety of criteria, including management quality, management integrity, and liquidity. Each company is granted a score based on the evaluation under the framework.

The secret to Emkay Emerging Stars Fund’s success has been its ability to identify investment trends and industries that are most likely to generate alpha early on.

This product is targeted at long-term investors. While most blue-chip stocks are trading at all-time highs, there are enough pockets of potential investment opportunities in the mid-and small-cap space.

One of the fund’s unique features is its Flexible Subscription Model, which allows investors to select between three payment options: 100% upon application, three tranches of 30%, 40%, and 60% over six months, or 10% per month for ten months.

The fund, which is open to both domestic and non-resident Indian investors, also enables quarterly redemptions following a one-year lock-in period.

There is no entry or exit load. “The launch of Emkay Emerging Stars Fund – series IV is a testimony of our commitment towards our valued investors. We believe AIFs have the potential to deliver desirable returns for the new age investors, having a broader investment horizon,” said Krishna Kumar Karwa, MD, Emkay Global Financial Services.