Ep 1 – Our Fund and Philosophy

Please find below the transcript for our snippet video:

Welcome to our Video Snippet Series. Through this, we aim open up the fund, philosophy and process to our current & potential investors and partners. At Itus Capital, we run a multi-cap focussed fund investing in companies which show an operational free cash flow growth.

Itus was set up as a vehicle to manage the partners money first. Every employee at Itus, has 50% of their bonus invested in the fund. Inherently, we believe this is the true long-term way of building a culture of equity investing within the firm.

We set up Itus on 3 pillars

1. Invest in companies that have free cash flow growth
2. Sell right, which is governed by our GPCG process – which we will discuss in a separate snippet in another video (we do not buy businesses for eternity, our churn rate historically has been at 20% per year and I expect it to continue in a similar trend).
3. Keep fees low

While every fund manager wants to be run the best performing fund, we want to be running the most consistent fund.

What’s the difference?

Running the best-performing fund is effectively saying we will generate the highest returns irrespective of market conditions, which frankly is not under our control. Running the most consistent fund is an obsessive focus on managing the downside volatility and ensuring discipline in the process of investing. What the latter means, is to stay disciplined around the investments made and the position size (exposure taken). We believe, this in essence will be the primary reason for investors to stay invested with us. We measure our success by how long investors stay with us. As this time increases, the experience they get from Itus as a vehicle to manage their funds will improve.

We believe in an open research eco-system, meaning all our portfolio investments, and research are open for others to see. This process has benefited us a lot and we believe this will continue to be the case in the future too. You will see a lot more of this in the future.

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