MARCELLUS CAPITAL TRUST

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Category AIF Category III

Company Marcellus Investment Managers Pvt Ltd

Fund Managers Ashwin Shetty, Saurabh Mukherjea

Marcellus Investment Managers Pvt Ltd

Marcellus Investment Managers was founded in 2018 with their main objective of impacting the Indian economy’s effective capital allocation. We plan to accomplish this by directing household savings into high-quality Indian enterprises with a long history of sound governance and capital allocation. Our portfolio management strategy not only strives to provide healthy returns to our investors but also to do so by assuming relatively moderate risks. Marcellus’ core investment management team has been together for 15 years, and their experiences and lessons learned throughout that time have shaped the company’s investment philosophy. SEBI has granted Marcellus permission to provide Portfolio Management Services (PMS, SEBI registration number INP000006183) and Investment Advisory (IA) services. The Marcellus Consistent Compounders are our flagship investment product. Services for Portfolio Management (CCP). CCP’s investing approach aims to put money into a small number of substantially moated companies that can generate robust earnings compounding over long periods of time with little volatility. The PMS offers enticing performance-based fee choices that align our interests with the investors. It also boasts one of the most cost-effective cost structures in the PMS market, with no entrance, lock-in, or exit loads.

The Three Pillars of Investing

Clean Accounts: Marcellus uses proprietary quantitative frameworks—combining forensic accounting and capital allocation assessment—to filter out companies with poor governance or accounting transparency. They prioritize businesses with high integrity.
Capital Allocation: They seek companies with a proven track record of prudent capital allocation. The ideal Marcellus company generates strong Free Cash Flow (FCF) and reinvests it back into the business (or into adjacent growth areas) to fuel further compounding, rather than wasting capital on inefficient projects.
Competitive Advantage: The firm’s investment team conducts in-depth primary research to identify businesses with "deep competitive moats." These are companies that can maintain or expand their market dominance, protecting their profitability from evolutionary or disruptive changes in the industry.

Key Operational Principles

Coffee Can Philosophy: Inspired by the concept of "Coffee Can Portfolios" (buying great companies and holding them for years), Marcellus aims to keep portfolio turnover low to maximize the benefits of long-term compounding and reduce trading expenses.
Bottom-Up Research: They focus on picking individual high-quality companies through rigorous fundamental analysis rather than trying to time the market or make top-down macroeconomic bets.
Concentrated Portfolios: Marcellus typically manages high-conviction, concentrated portfolios (often 10–20 stocks) to ensure that the performance of their best ideas drives the portfolio outcomes.
Valuation Strategy: Rather than relying on standard P/E multiples, they prefer long-term cash flow-based valuation models, as they look for companies with long growth runways.