Investment Philosophy

India Avenue’s core investment philosophy seeks to capture two primary sources of investment return over time:

  • India’s expected strong GDP growth over the upcoming decades is likely to lead to significant returns from investing in its capital markets
  • Active management, particularly where markets are less efficient, is likely to produce superior returns over the long term in comparison to passive investing

To benefit from mispricing which can occur in an inefficient market, it is our view that partnering with selective local investment advisers, to identify the best companies to invest in, can lead to substantial value-add, relative to investing passively in a benchmark.

Investing for Alpha

It is our view that equity markets around the world operate with differing levels of efficiency. The more “deeply traded” the market is, with significant levels of sell-side coverage and regular company profit updates, the more efficient the pricing of securities become.

It is our view that emerging markets like India remain relatively inefficient in its pricing of securities. This is particularly the case for small-to-mid capitalisation companies where the level of information disseminated is likely to have less transparency.

Our carefully selected local investment advisers are more likely to benefit from on the ground broker networks, access to management, a better understanding of microeconomics drivers and reforms which can change an industry.

By leveraging from the skill set of our investment adviser partners, we believe we can deliver to our clients the potential to achieve investment returns higher than a passive investment over the recommended horizon.