Dalton Strategic Partnership (DSP), the global investment specialist, has appointed Gaurav Pant as investment advisor to the new MST Indian Absolute Return Fund (MSTIARF). The fund is expected to launch in September 2011 as a sub-fund of the Melchior Selected Trust, a Luxembourg SICAV.
Gaurav joins DSP from Goldman Sachs where he worked for over 8 years, most recently as executive director with Goldman Sachs Principal Strategies in London. He has a degree in Engineering from Delhi College of Engineering and an MBA from the Indian Institute of Management, Ahmedabad. He will join DSP’s existing Indian equity investment team based in Mumbai.
The investment objective of the fund is to generate consistent, high levels of positive absolute returns from a portfolio of both long and short Indian equities. The fund will aim to deliver an annual return of 12-18% whilst reducing the normal volatility experienced by investors in Indian equities.
The portfolio will invest predominantly in highly liquid listed equities and consist of approximately 25 carefully constructed themes which aim to generate alpha and isolate risk. Ideas will be generated by bottom up stock selection within a macro overlay. The fund will ordinarily operate within a relatively modest net exposure range of -10% to +25%, and an average gross exposure range of 80 – 120%.
Magnus Spence (pictured), Managing Partner at DSP, says: ‘’The dispersion of returns in large, liquid Indian equities is substantial, and greater than that which is found in most other markets. This creates significant opportunities for the generation of alpha. The combination of a highly talented relative value investor such as Gaurav, with a market which offers an abundance of sizeable dispersion opportunities should deliver outstanding risk adjusted investment returns.
“Most investors recognise that India offers one of the most exciting secular growth investment opportunities on the planet, however many of those same investors find the volatility of Indian equities unpalatable or too traumatic. The MSTIARF will enable investors to capture the exciting return potential of the Indian market, whilst at the same time generating less volatility and cushioning against the frequent, and sometimes violent, draw-downs that the market displays.”
