In our previous episode, we took pride in discussing our firm’s exceptional approach to Capital Calls, highlighting our pioneering role in effectively communicating with our partners and investors during volatile market conditions.
In this episode, we would like to discuss our GPCG Framework. While the equity market in India is currently exhibiting positive trends, we acknowledge the potential turns and vulnerabilities that may arise along the way. As growth investors, we focus on quality stocks instead of chasing high valuations. This emphasis on quality forms the fundamental basis for constructing each of our clients’ portfolios.
So, what exactly is our GPCG Framework? GPCG stands for Growth, Price, and Corporate Governance. Our investment discipline is derived from a robust process guided by this internal framework.
As growth investors, we seek out companies with strong cash flows and a demonstrated ability to reinvest generated cash to yield returns surpassing the cost of capital.
We carefully evaluate the price at which we buy businesses. While there may be instances where we are willing to pay a premium, it is only when the underlying business possesses a structural moat, be it through distribution networks, pricing power, network effects, or monopolistic characteristics.
We place great emphasis on understanding the management of the businesses we invest in. We dedicate significant time to engage with various stakeholders, such as distributors, retailers, channel partners, and sourcing vendors. Additionally, we connect with former employees of the companies to gain insights into the firm’s culture. Poor corporate governance practices are non-negotiable for us.
This unique and robust internal process guides us in selecting the right businesses and exiting those that do not align with our investment thesis. We hope that this insight provides a deeper understanding of our day-to-day process and how we risk manage each of our client’s portfolios.
In our upcoming episode, we will delve further into our processes and any additional thoughts. Until then, we wish you a delightful weekend!
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As a part of our ongoing commitment to keeping you informed, we remain dedicated to our SIP program, providing investors with a convenient avenue to regularly enhance their portfolios. We encourage you to explore the benefits of this program for your clients. If you require more details, please don’t hesitate to reach out to your dedicated relationship manager at [email protected].