2Point2 Capital PMS
2Point2 capital PMS is a well-known investment company which focuses on long term investments in top growing companies listed in several Indian stock exchanges. The research team of this Portfolio Management Services company specifically searches those stocks for investment which has a reasonable valuation only.
2Point2 Capital PMS Review
2Point2 Capital was established in the year 2005 by Amit Mantri and Savi Jain.
Both have a combined 17 years of experience in the financial space, primarily in the hedge fund industry and private equity. The main aim of this investment company is to protect the client’s capital amount by generating a higher return as compared to the index returns in the long term.
Both the co-founders of 2Point2 Capital PMS have completed their studies together from IIT Kharagpur. And there is an interesting story behind the name given to the firm 2Point2 Capital investment company.
Actually, “2.2” is the length of a road that runs through the IIT Kharagpur centre and since the founders are an alma-matter of this college, they decided to go ahead with this title.
The company focuses on value investing, it means they purchase only those securities that are currently at a reduced rate as compared to their inherent value. It believes that the company has not invested in stocks but have purchased a part of the company.
2Point2 Capital takes market fluctuation as an opportunity to buy a stock at a reduced price and sell a stock at a premium to intrinsic value.
Pure Profit Game, right?
In this article of 2Point2 Capital PMS, we will try to cover each and every important aspect of its portfolio management service. We will try to throw light on its strategies, commission models, charges, performance, Investment plans, returns, customer support, and finally, some of the most frequently asked questions.
Let’s start our discussion with the types of PMS offered by 2Point2 Capital PMS:
2Point2 Capital PMS Types
There are two types of PMS which are offered by 2Point2 Capital. First is Discretionary PMS and second is Non-Discretionary PMS. Both types of PMS are common forms of PMS that are offered by most of the PMS houses.
You will get both types of PMS services from 2Point2 Capital also. Lets quickly discuss:
In this type of PMS, a fund manager gets the right to handle the portfolio of a client. The fund manager can add and remove any stock/debt from the portfolio for getting a better return.
This is the second type of PMS, under this type, a client does not give the right to handle his/her portfolio to the fund manager instead they handle the portfolio by themselves. The fund manager can give a suggestion regarding the portfolio to the client but, the ultimate decision will be taken by the client only.
2Point2 Capital PMS Manager details
As we know that the experience and the educational background of a fund manager plays a vital role in describing the knowledge he/she has. Higher the educational qualification and experience in the field depicts the ability of the fund manager to handle the portfolio of a client.
At the same time, you’d be more comfortable allowing a qualified fund manager to take calls on your monetary investments, right?
Now, we are going to discuss the details of the fund manager at 2Point2 Capital PMS:
Savi Jain has more than 9 years of experience in the field of Asset management and more than 6 years in private equity. Before starting 2Point2 Capital, he was associated with a Mumbai based private equity fund named Tano Capital as an Assistant Director.
He also worked as a director of MSH sarees. In his 6 years of career, he has worked for more than 500 investment portfolios in private equity.
He is associated with not only private equity but has a good experience of handling listed investments also such as DCB Bank and Safari Industry, ICICI Prudential life insurance, Astra microwave etc.
Savi completed Industrial Engineering from IIT Kharagpur and he is also a CFA.
Amit Mantri has 8 years of investing experience in both public and private markets.
Before starting his career at 2point2 Capital, he was a vice-president of Mumbai based hedge fund company Hornbill Capital. Prior to this, he was part of the investment team at IDFC alternative. He also worked as an Alternate director of 20 cube Logistics.
Amit has completed the Post Graduate Diploma in Management from IIM Bangalore, Engineering from IIT Kharagpur. He is a CFA holder also.
Bhavit has 8 years of experience in Asset Management. Completed Master in finance from Mumbai University. He is the head of the operation at 2Point2 Capital PMS.
2Point2 Capital PMS Strategic Details
2Point2 Capital works on three different strategies one is for large-cap strategy, another is a diversified strategy and the last one is small-mid cap strategy. All strategies are used by the company as per the requirement and instruction of the clients.
The large-cap strategy fits for those portfolios that are created with a view of long-term return. Under this strategy, a well established and growing companies are selected to put in the portfolio. A well- established company has stable growth and can give return to shareholders.
So, the strategy is applied when a client looks for stable and continuous earning through his/her portfolio.
This strategy targets capital appreciation over the short term return or profit and the stocks which are reasonably priced.
Under the diversified strategy, stocks of the portfolio are selected from different sectors and industries to minimize or diversify the risk of loss. The aim of investment under the diversified strategy is to invest in securities which will give a return in the long period of time.
The return will be booked in the stock and it will have to do nothing with the moment of an index.
Small-Mid cap strategy:
This is the last strategy used by the company. Under this strategy, companies which are in its beginning to the middle phase of the business cycle are added to the portfolio. It gives an opportunity to the company to make the expansion of their business and ultimately it gives a better return to the shareholders.
Growth opportunity of a company means positive growth of a portfolio. The investment return period under this strategy is normally between 3-5 years.
At the same time risk associated with the companies under this strategy is moderately high as the companies might face some obstacle in its growth also.
Investment of 2Point2 Capital PMS is based on the following criteria:
2Point2 Capital invests in only those businesses that stand strong in this competitive age. It means those companies which are well-recognized brands among the customers, use technology at the forefront, inherent cost advantage etc.
These businesses have high capital efficiency and positive cash flow.
The company invests in only those business which has a strong corporate governance team and treats its minority shareholder equally. The company believes that long term investment return can be generated only by investing in strong corporate governance oriented companies.
Margin of safety:
2Point2 Capital invests in businesses by keeping the margin of safety as a top priority. They invest in those companies whose valuation comes under discount to intrinsic value and it will result in the margin of safety.
It selects only those sectors for investment that have long growth opportunities. They avoid those sectors which come under a highly regulated sector, which has technological disruption, sectors linked to the commodities prices etc.
So, we can say that the above four points also come under the unique strategy used by 2Point2 Capital for making an investment.
2Point2 Capital PMS Returns/Performance
2Point2 Capital PMS is one of the well-performing portfolio management services offered out there. It has maintained a benchmark-beating performance since its inception.
In the table given below, we will discuss the performance of 2point2 capital for last 3 years. You will be able to see the portfolio management services returns provided by the PMS house:
*Performance for FY 17 is only for 8 months as cumulative returns are from 20th July 2016 to 31st March 2019.
Return from dividend received is included in the total return fund.
2Point2 Capital PMS: Investment plans
2point2 capital has four types of investment plans which suit the client needs according to their financial strength. Investment plans are of different range starts from ₹25 Lakhs and can go above ₹5 CR. Between there are four slabs of investments.
Here is the list of four different types of investment plans of 2point2 Capital.
- Bronze (₹25L – ₹50L)
- Silver (₹50L- ₹1 Cr)
- Gold (₹1Cr – ₹5 Cr)
- Platinum (₹5 Cr & above)
So, we can see four investment plans are Bronze, Silver, Gold, and Platinum. The bronze plan has investment range from ₹25L – ₹50L, the Silver plan is ₹50L – ₹1CR, Gold is ₹1CR – ₹5CR and the last one is Platinum which starts from ₹5CR &above.
So, one can choose any plan as per their investment capacity. Higher the investment amount, higher the amount of return.
2point2 Capital PMS: Commission/Fee model
One is required to make payment/commission/fee for the service or product he/she gets from anyone. The case is the same here for getting portfolio management service.
If you are getting a PMS service from any company’s fund manager, you will have to pay a commission to the fund manager which will be discussed before getting service.
2Point2 capital offers three types of commission model to the clients. They can choose any one according to their convenience and comfort.
Three Types of commission model are:
- Prepaid model
- Volume-based model
- Profit sharing model
Here is the detail of each model:
Prepaid Commission model:
Under prepaid commission model, you will be charged before getting PMS service. The company has nothing to do with the profit or loss of a client’s portfolio.
If a portfolio performs more than expected profit or less than expected profit, in both the cases only a client will have to suffer or rewarded because the commission is already paid.
2Point2 Capital charges the commission based on the investment amount of the client. A percentage of investment is fixed by the company to charge as a commission/fee of portfolio management service.
The total transaction value is calculated for the portfolio to pay the commission under the volume-based commission. Under this model, only the weight of the transaction volume is taken into consideration to fix the amount of fee to be paid to the fund manager.
In this model, the authenticity of the portfolio manager plays a vital role because volume can be increased by the manager without completing a profitable transaction also. So, it depends on the fund manager how he/she increases the volume of transaction.
Profit sharing based commission:
Profit sharing based commission model is the most favourable model for a client. As in this model, you will share a certain percentage of your profit you earned by the performance of your portfolio.
A fund manager always tries to put his best if he is supposed to get a commission under the profit sharing model. Higher the profit, the higher the commission/fee.
The fund manager knows very well that no profit, no commission. So, at least in this model, a client can remain assured about the effort of a fund manager.
As we have discussed all three commission models, now the main thing remains is the percentage which will be charged on the basis of profit, volume and investment in all three models.
Here is the table to show the details of the percentage charged as a commission by the fund manager:
2Point2 Capital PMS Charges
The commission charged by the Portfolio management companies is not the only charge which a client is required to pay. Except for the commission/fee of a fund manager, there are various charges which levied on a client when he/she gets portfolio management service.
Here is the list of PMS charges and percentage also.
- Management fee- This depends on the type of commission model you have selected to pay commission.
- Upfront fee- This ranges between 0.8%-0.18% of the entire plus value of a portfolio.
- Brokerage fee- The range is 0.008%-0.012% of the total transaction.
- Depository charge– It ranges somewhere between 0.18%-0.28% of the price of the total benefit.
- Custodian charge– It is between 0.28%-0.38% of the value of quality you get.
- Exit Load cost: It is charged according to the time of the amount of withdrawal. If the removal is within the 12 months of PMS creation, then the exit load cost will be 1.12%-1.18% of the amount withdrawn. If the removal is after 12 months of PMS creation, then the exit load cost will be 0.35% of the amount withdrawn.
2Point2 Capital PMS Benefits
Following are the benefits of Portfolio Management Services from 2point2 Capital PMS.
Attractive investment philosophy: 2Point2 Capital has an attractive investment philosophy which runs on the principle of buying any asset with a margin of safety.
Well qualified and experienced team members: The team member of 2point2 Capital is well experienced in Hedge fund and private equity. They are well-qualified candidates of IIT, IIM, CFA.
So, a client can get an expert opinion and can get benefitted from their experience and knowledge also.
Affordable interest rate: The company charges a low fixed fee from the clients for the services offered by them. They focus on the profit sharing commission model. Also, the company has invested a significant part of its own capital in the same portfolio which is more than 10CR.
Good track record: The performance of the portfolio has made a good track record. The portfolio has made a strong return by beating NIFTY and MID-CAP 100 index. Not only this but has beaten all leading mutual funds by a wide margin.
Superior class Network and knowledge: Idea of investment is generated through the network of PE funds, mutual funds, and brokerages.
2Point2 Capital PMS Customer Support
As a client of 2point2 Capital PMS, you will get SMS and Email support from the company. You will also get a whatsApp chat facility. A relationship manager will also be appointed for your convenience.
A client with the asset value of the portfolio more than 1 Crore can fix an appointment with the finance manager from 1-5 times in a month. While the customers of short asset portfolio value can fix an appointment with a fund manager.
2Point2 Capital PMS Conclusion
2Point2 Capital PMS provides one of the best portfolio management services to its clients. The return it gives to clients is above the benchmark. The basis of the investment is on some strongly selected criteria. The aim of the company is to offer a strong return to its clients.
And above all, the company has a good management team and has strong ethics. It helps the company to cover big companies from all over the country for PMS creation. The firm believes in making a strong relationship with its customer which are mostly big companies.
Hence, we can say that 2point2 capital is one of the best choices for clients who want to invest in portfolio management services.
In case you are looking to use PMS Services or need any assistance in stock market investments, let us assist you in taking the next steps forward:
2Point2 Capital PMS FAQs
Here are some of the most frequently asked questions asked by potential clients from 2Point2 Capital PMS:
Who can be an investor of PMS?
Ans: Any individual or non-individual like a partnership firm, HUFs, or Corporate body with the minimum Capital of Rs25 lakhs.
Can a client withdraw his/her profit at any time?
Ans: Yes the profit, as well as capital can be withdrawn at any time. But, the client will have to pay exit charges on withdrawal before completion of one year.
Can new funds be added on a regular basis?
Ans: Yes, new funds can be added on a regular basis through cheque or wire transfer.
What is the process of NRI investment in PMS?
Ans: An NRI can invest either through an NRO account or NRE.