Abakkus Diversified Alpha Fund – 2

Abakkus Diversified Alpha Fund – 2 aims to adopt a strategy of stringent stock selection process using unique 40:30:20:10 approach to portfolio construction to capture opportunities across market capitalization. The Fund shall track key sectors that continue to grow at a consistent pace and demonstrate long term return potential. The Fund shall be focused through a collection of core equity holdings and shall seek diversification across various sectors. The Fund endeavours to generate alpha via exposure to mid, small and micro caps and lower the volatility through large cap and larger mid cap exposure. The Fund maintains risk discipline and liquidity management by way of position sizing as smaller capitalization companies have incrementally smaller weights.

Benchmark: BSE 200

Inception Date: November 7, 2023

SEBI Registration: Fifth Scheme of Abakkus Growth Fund, a Category III AIF having SEBI registration no. IN/AIF3/18-19/0550

Investment Philosophy

Abakkus Asset Manager Private Limited follows six core principles that shape its investment decisions and long-term strategy.

Alpha Generators
The firm seeks to generate alpha over market benchmarks by investing in growth-oriented businesses where profitability is expected to outpace the broader market. It focuses on fundamentally underpriced companies with reasonable growth visibility, particularly mid-cap businesses with scalable models and strong expansion potential.

Fundamentals Driven
A bottom-up research approach anchors the investment process, with sharp attention to balance sheet strength and earnings quality. The philosophy emphasizes that financial numbers carry more weight than narratives, and sustainable returns are ultimately driven by consistent earnings growth.

Comfortable Being Contrarian
The investment team is willing to be early or differentiated in its positions, avoiding momentum-driven strategies. It evaluates opportunities across sectors, market capitalizations, and business cycles without being restricted by consensus thinking.

Agile and Flexible
Every investment opportunity is assessed on its individual merit. The firm is not confined to a predefined theme or style, allowing adaptability as market conditions evolve.

Patience in Capital Allocation
The approach reflects a buy-and-hold mindset, investing in stocks as ownership in businesses rather than short-term trades. The team thinks like long-term partners in the companies they back.

Disciplined Risk-Reward Framework
Expected returns must justify the risks undertaken. Significant emphasis is placed on valuation—understanding what is already priced in and ensuring the value derived outweighs the uncertainty assumed.

5D Investing Process

A structured and disciplined framework guides the investment journey, ensuring consistency, depth, and informed decision-making at every stage.

01 Discover
The process begins with a broad investment universe of nearly 6,000 companies, from which approximately 1,500 are identified as investable. Initial screening draws on annual reports, analyst coverage, in-house screeners, team expertise, ecosystem insights, and continuous news flow tracking to generate credible leads.

02 Delve
From this refined pool, deeper analysis is conducted on around 350 companies using the proprietary MEETS framework. This evaluates management quality, earnings trajectory, event triggers, timing factors, and structural strengths, enabling sharper filtration of opportunities.

03 Develop
Comprehensive macro and micro analysis is then undertaken on over 100 companies. This includes management interactions, competitive positioning assessment, identification of potential triggers, peer comparison, and detailed financial modelling with sensitivity analysis to test assumptions.

04 Detail
Investment ideas are narrowed down to roughly 75 stocks. Portfolio construction emphasizes liquidity considerations, sector exposure balance, portfolio beta alignment, and robust risk management practices. Every decision is guided by a disciplined risk-reward framework, ensuring expected returns justify the risks undertaken.

05 Deliver
The final portfolio typically comprises around 30 carefully selected stocks. Active portfolio management follows, including continuous monitoring of news flow, periodic reviews, and adherence to a defined sell discipline. Decisions are driven by changes in price, fundamentals, or data points, maintaining agility while preserving long-term conviction.

At its core, the 5D process integrates structured research, valuation discipline, and dynamic risk oversight to translate insights into sustainable investment outcomes.

Why Abakkus?

Experience
The firm is backed by a well-qualified and dedicated team of professionals with decades of combined market experience, bringing depth, perspective, and institutional knowledge to the investment process.

Performance
It has established a strong performance track record spanning over two decades in public equity investing, demonstrating resilience and capability across varying market cycles.

Commitment
Operating with a start-up mindset, the organization maintains a high degree of commitment, urgency, and passion toward delivering measurable investment outcomes.

Positioning
The investment approach focuses on alpha generation beyond widely tracked large-cap names, driven by non-consensus, in-house research and differentiated insights.

Opportunistic Approach
The firm retains flexibility to invest in emerging sectors and evolving themes, particularly those aligned with India’s entrepreneur-led growth economy.

Consistency
The investment team has delivered consistent results across market environments, supported by a proven and disciplined performance record.