13 Questions for White Oak Capital's Ayush Abhijeet

In this series, we ask leading fund managers about everything from their investment strategy, to role models, their views on cryptocurrency, and what they’d never invest in

Marina Gerner 13 January, 2022 | 11:15AM
Facebook Twitter LinkedIn

neon question mark

In this series of short profiles, we ask leading fund managers to defend their investment strategies, reveal their views on cryptocurrency, and tell us what they'd never buy.

This time our interviewee is Ayush Abhijeet, associate director of investments at White Oak Capital, and adviser to the Morningstar 5-star rated Ashoka India Equity Investment Trust.

Which Sector Provides The Biggest Opportunities in 2022?

We’re seeing investment opportunities in well-run private sector financials, IT services, consumer discretionary, specialty chemicals and healthcare. On the other hand, we don’t see many attractive opportunities in energy, utilities, telecom, and real estate.

What's The Biggest Economic Risk Today?

From a near-term perspective, any correction in global markets, or a more-than-expected rise in global or US bond yields.

Describe Your Investment Strategy

We look to generate outsized returns by investing in great businesses at attractive valuations. We focus on businesses that have three key attributes: superior returns on incremental capital, scalability, and robust management in terms of execution and governance. The team strives to buy these businesses when they are available at a substantial discount to their intrinsic value. We use a proprietary, OpcoFinco analytical framework to provide insights into economic cash flow generation characteristics and the intrinsic value of a business.

Which Famous Investor Do You Admire?

[Hedge fund billionaire and value investor] Seth Klarman for his investment discipline, clarity of thought and principled approach towards capital stewardship.

Name Your Favourite "Forever Stock"

I don’t have one! We are very disciplined about valuation, and don’t subscribe to the school of thought that believes in buying and owning a great business without due consideration for valuation.

What Would You Never Invest In? 

We seek to avoid companies with poor governance, structurally low returns on capital and those facing existential risk. Consequently, companies from sectors such as commodities, utilities and telecom are usually absent in the portfolio as they suffer most from some of these unfavourable business characteristics. We also avoid investing in state-owned enterprises, as government-owned entities have social objectives that often assume greater priority over investor interests.

Growth or Value?

Neither. We are style-agnostic. In our view, it is important not to get bracketed into a particular style. It is always important to run a balanced portfolio that looks to minimise all the factor risks. Only a balanced portfolio will ensure outperformance across all market cycles in both up- and down-markets, where the focus on ensuring alpha generation is a function of stock selection.

Cryptocurrency: Public Enemy or Pioneering Proposal?

We do not invest in crypto. Having said that, the underlying blockchain technology does seem to have the potential to spur interesting business models. As with any new, experimental technology, there should be a healthy mix of scepticism and optimism. Emergence of a sound regulatory structure would be a crucial next step.  

What Can be Done to Increase Diversity in Fund Management?

It is an important and relevant industry question. Within the business we have strong oversight from the members of the board and committees, which aim to bring together a balanced diversity that is beneficial to the investor interest.

Have You Ever Engaged With a Company And Been Particularly Proud (or Disappointed) in The Outcome?

We regularly engage with portfolio company management teams on business and ESG performance. There have been instances where we have identified ESG issues and urged the management to take remedial action.

In one particular instance, we did not invest in a large cap financial services company as it had a history of weak corporate governance. Once a leadership change was triggered, we had a series of discussions with the new management and explained our concerns. Only once we witnessed the changes being implemented, which were to our satisfaction, did we decide to invest.

What's The Best Bit Of Advice You’ve Ever Been Given?

"It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so."

What Would You Be If You Weren’t A Fund Manager?

I'd be a musician!

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

About Author

Marina Gerner  is a freelance journalist