Pelican PMS
|
| Type | Private |
| Industry | Financial services |
| Founded | 2018 |
| Founder | Kanu Krishna Warriar |
| Headquarters | Chennai Tamil Nadu, India |
| Key People | Kanu Krishna Warriar, Director |
| Deepak Radhakrishnan, Portfolio Manager | |
| Sriram P K, Head Business Development | |
| Products | Portfolio Management Service |
| Number of employees | 4 |
| Parent | Pelican Holdings Pvt Ltd |
| Website | www.pelicanpms.com |
Introduction[edit]
Pelican PMS is the Portfolio Management Service offered by Pelican Holdings Private Limited, located in Chennai, India.
History[edit]
Pelican Holdings Private Limited was incorporated in Chennai, India during the year 2003. PMS Division was a part of Subsidiary GoCapital Finance Limited, which merged with Pelican Holdings Private Limited in 20019. The SEBI registered Portfolio Management Service is branded as Pelican PMS.
The Pelican PMS strategy[edit]
Stock selection and timing (buy/sell) of investment decisions are two key aspects taken care by any Portfolio manager.
Pelican tries to combine two investment philosophies namely the Equity Life Cycle (ELC) and Mean Reversion in order to time the investments. The ELC is mapped using the PE of the Nifty over a period. For a given fundamental scenario, price moves up and down based on factors like risk appetite, liquidity, macro risk and other similar systematic reasons which are not diversifiable and therefore the need to provide for standard deviation based levels. The movement of PE happens due to both change in Price (P) and change in Earnings (E). In a rising PE scenario, the sentiment is positive and is reflected in the higher prices and supported by earnings growth. However as the prices start to move faster than the earnings there is PE expansion and eventually a bubble scenario. The bubble bursts when the prices are no longer justifiable to the earnings offered. This would be the end of the ELC. On the corollary, as the PE reduces, the earnings cushion the prices up until the discount becomes too high and attractive indicating an end to the sell off and beginning of a new ELC.[1]
Mean reversion of the PE also takes place along with the ELC. Statistically, the range between +/- 2σ (standard deviation) from the rolling Mean PE is where 95% of the trading takes place. Breaking this range above (Euphoric) or below (Despondency) is generally an outlier event and continues only for a short period before returning back within the Mean range.[2] Investment returns are maximized when timed near the lower band of the ELC. Risk is further reduced by staggering the investment at predetermined Nifty PE levels as indicated by the standard deviation.[3] Since the staggering will require funds to remain idle for a period of time, this un-utilized amounts are parked temporarily in Liquid funds gaining a risk free return. The staggered investment style will auger well during market declines and reduce the risk to capital.
Stock selection is the second aspect undertaken by the fund manager. There are several assumptions on which forecasts are made, and hence chances of error remain high. Most fund managers are also susceptible to several biases. Hence it is very important to have an objective stock selection process that is devoid of any unknown, incalculable risks.
The manageable risks can be significantly reduced by meaningful diversification across sectors and in large cap stocks. In the case of stock selection, the investment strategy would be to invest in a portfolio of companies belonging to the large cap market leaders which primarily constitute the Nifty 50. It may also consist of ETFs (Nifty ETF, Midcap ETF) which can offer participation in the broad market. Selecting stocks from the large cap universe, those that have an established track record and leadership position will reduce risks that may arise due to lack of liquidity, information deficiency, product failure etc. By keeping majority of the risks out of the framework and concentrating the portfolio to only a few stocks with different business models will provide better risk adjusted returns.
Corporate Affairs[edit]
Pelican Holdings is part of the multi-faceted Pelican Group which has interests across Capital markets. For nearly two decades the Pelican Group and its Partners have served as successful advisors for clients investing across various asset classes.
References[edit]
- ↑ DeAngelo, H., DeAngelo, L. and Stulz, R.M., 2006. Dividend policy and the earned/contributed capital mix: a test of the life-cycle theory. Journal of Financial economics, 81(2), pp.227-254.
- ↑ Poterba, J.M. and Summers, L.H., 1988. Mean reversion in stock prices: Evidence and implications. Journal of financial economics, 22(1), pp.27-59.
- ↑ Damodaran, A., 2007. Strategic risk taking: a framework for risk management. Pearson Prentice Hall.
https://www.sebi.gov.in/index.html https://en.wikipedia.org/wiki/Non-bank_financial_institution https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=26®no=INS231535530 Poterba, J.M. and Summers, L.H., 1988. Mean reversion in stock prices: Evidence and implications. Journal of financial economics, 22(1), pp.27-59. DeAngelo, H., DeAngelo, L. and Stulz, R.M., 2006. Dividend policy and the earned/contributed capital mix: a test of the life-cycle theory. Journal of Financial economics, 81(2), pp.227-254. Damodaran, A., 2007. Strategic risk taking: a framework for risk management. Pearson Prentice Hall.
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