1. PPFAS Long Term Value Fund

2. Core value investing

Buy and hold from a Value Investing
perspective

Ability to stay in cash for a while

3. PPFAS Long Term Value Fund

Equity
− Buy and hold equity from a Value Investing
approach
− Both Indian and Foreign

Opportunistic deployments in
− Cash to futures arbitrage
− Delisting / buy back arbitrage
− Debt securities
− Structures (Capital Protection Oriented)

4. “Value Investing”

Stock ownership as Business Partnership

Partners (Honest & Competent)

Great businesses
− Entry barriers, high return on equity, less debt,
understandable and predictable
− Available at attractive valuations

5 Star meal at Udipi rates, not vada pav

Typically 20 to 25 businesses owned

Low churn & long term holding

5. Why overseas stocks?

Home country bias

De-risking

Sectoral opportunities not available here
− Innovative IT, Pharma opportunities
− Upstream energy

Valuation gaps
− FMCG

Get paid additional 6%!

Amazing recent results

6. Cash to Futures Arbitrage

We saw this in 2007 ; investors who wanted
liquid investments and predictable returns

Returns then were around 18% p.a.

Buy a stock (say SBI) at Rs. 1,000 and sell the
same stock in futures at say Rs. 1,010

No risk whether SBI goes up or down in price

7. Delisting / Buyback / Open offers

Promoter group want to buy shares (forced by
regulators or otherwise)

Market price of share is known

Purchase price is know

Time frame is known

Acceptance ratio can be estimated

Low risk, opportunistic short term funds
deployment

8. Structures

Opportunities come occasionally

Conditions
− High interest rates
− Low volatility in equity prices

Advantage
− Heads we win
− Tails the market loses

If market goes down, our capital gets protected,
if market rises, we get equity participation

9. Asset Allocation

Indian Equity 65% to 100%

Derivatives (hedge) 0% to 50 %

Net Indian Equity 15% to 100%

Foreign Equity 0% to 35%

Debt Securities & cash 0% to 85%
(including hedge)
All tax benefits of Equity Scheme apply

10. What are valuations like right now?

Of late, smaller companies have been unjustly
punished leading to valuations in some of them
becoming very attractive.

Select US stocks (especially in energy, FMCG
& IT space) are very attractive.

Crude oil, gold and other commodities coming
off highs a positive.

Excesses of the past will still haunt the
indisciplined companies.

13. We will be happy to answer any questions you
may have......