White Oak India Digital Leaders

Fund Snapshot

Investment Philosophy

White Oak Capital believes that investing in exceptional firms at attractive prices yields outsized returns over time. A great company is well-managed, has a scalable long-term opportunity, and delivers better returns on incremental capital, as well as a proven track record of execution and governance. Valuation analysis is an important part of their study. According to the firm, White Oak Capital conducts in-depth valuation analysis to find firms that are selling at a significant discount to their real worth.

They hunt for firms whose cash flow or earnings projection, and hence intrinsic value, differs considerably from what the market has put into the shares. Valuation is appealing when the current market price is significantly lower than the underlying value. White Oak Capital prefers to focus on economic free cash flows above accounting cash flows and assigns a terminal value based on the company’s success.

The objective of the investment approach is on long-term absolute returns. Instead of betting on macro, they offer a basic yet effective investment strategy of selecting and investing in companies.White Oak Capital often avoids enterprises with poorer qualities, such as poor corporate governance, low incremental returns on capital, or those that suffer technology obsolescence risk. Poor corporate governance may take many forms, including syphoning of cash or value, stock price manipulation, unethical business activities, or misaligned interests, and low returns on new capital might result from excessive industry competition or capital misallocation.

Seasoned Team With Global Experience

A strong team of seasoned investment experts has worked through numerous market cycles. Extensive worldwide investment expertise lends itself to a keen understanding of pattern detection when investing in India. Each firm is researched by two analysts in a unique team-within-team framework.

Time Tested Investment Philosophy

They are investing in exceptional firms at attractive prices yields outsized profits over time. Rather than skewed accounting earnings, the valuation approach is based on economic cash flows. A great business generates higher returns on more capital, is scalable, and is well-managed in execution and governance.

Disciplined Research Process

Intensive basic research to evaluate business traits and valuation using the OpcoFincoTM framework. As a beginning point for the research process, a structured screening approach examines a company’s governance-DNA. An intensive factory visits meetings with firm management, rivals, suppliers, customers, and other trade participants will help you gain a 360-degree view of any organisation.

Balanced Portfolio Construction

Ensure that alpha creation results from stock selection in a well-balanced portfolio. Avoid market timing, sector rotation, and other top-down macro bets by investing in companies. Understand, monitor, and try to keep residual factor risks, which are a result of stock selection, to a minimum.

Investment Culture

Why White Oak India Digital Leaders Strategy

• The epidemic has sped up the use of digital technology in a variety of industries by several years. According to McKinsey’s Worldwide Survey, global digital adoption has increased by at least three years, and by four years in Asia Pacific.
• As global value shifts from ‘Physical’ to ‘Digital,’ digital leaders and innovators have driven shareholder wealth creation across industries.
• The White Oak India Digital Leaders Strategy is an investment strategy that aims to profit from this shift in value and digital adoption.

Following Are the Indicative Portfolio Constituents

Sectors with Indicative Portfolio Components: Generally, 80 percent of the portfolio weight is invested in firms that are:

• IT Services, Communication Services, Media, New-age: Investing in new technologies like AI, Blockchain, Machine Learning, Augmented Reality (AR)/ Virtual Reality (VR)
• New-age, Consumer, Financials, Healthcare: Delivering world-class customer experience through new channels
• New-age, Financials, Industrials: Enabling ‘Digital India’ and developing products for the digital ecosystem
• Pharma, Chemicals, Auto: Spearheading R&D in their respective sectors
• IT Services, Industrials: Adding strong automation capabilities
• All sectors: Leaders in adopting technology in their businesses

Portfolio Construction

White Oak Capital often avoids enterprises with poorer qualities, such as poor corporate governance, low incremental returns on capital, or those that suffer technology obsolescence risk. Poor corporate governance may take many forms, including syphoning of cash or value, stock price manipulation, unethical business activities, or misaligned interests, and low returns on new capital might result from excessive industry competition or capital misallocation.

The greatest basic risk, they say, is not recognising or completely comprehending the unique business risk of each firm in the portfolio. White Oak mitigates this danger by conducting extensive foundational research. They also work to comprehend, manage, and reduce residual factor risks that arise from stock selection.

Investment Philosophy

White Oak Capital believes that investing in exceptional firms at attractive prices yields outsized returns over time. A great company is well-managed, has a scalable long-term opportunity, and delivers better returns on incremental capital, as well as a proven track record of execution and governance. Valuation analysis is an important part of their study. According to the firm, White Oak Capital conducts in-depth valuation analysis to find firms that are selling at a significant discount to their real worth.

They hunt for firms whose cash flow or earnings projection, and hence intrinsic value, differs considerably from what the market has put into the shares. Valuation is appealing when the current market price is significantly lower than the underlying value. White Oak Capital prefers to focus on economic free cash flows above accounting cash flows and assigns a terminal value based on the company’s success.

The objective of the investment approach is on long-term absolute returns. Instead of betting on macro, they offer a basic yet effective investment strategy of selecting and investing in companies.

White Oak Capital often avoids enterprises with poorer qualities, such as poor corporate governance, low incremental returns on capital, or those that suffer technology obsolescence risk. Poor corporate governance may take many forms, including syphoning of cash or value, stock price manipulation, unethical business activities, or misaligned interests, and low returns on new capital might result from excessive industry competition or capital misallocation.

Key Attributes

• The presence of one business characteristic does not indicate the absence of the other three.
• All of the qualities must be present in all stocks, at a minimum stated level or greater.
• When a certain attribute is highlighted, the filter standard for threshold clearance for that attribute is retained at its highest level. In contrast, the filter for the other three attributes is kept at its maximum level.
• The barrier will be average or below average for all stocks for no characteristic.