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In this guru portfolio series, Pankaj Murarka, a 25-year investment industry veteran, talks to Mint about his financial journey, how he got started with Renaissance and his experiences working with investment guru, the late Rakesh Jhunjhunwala. Edited excerpts:
How did your financial journey begin?
I was fascinated by stock markets during my early college days. Some of my friends used to invest in stock markets and that was after Harshad Mehta’s market crash (1992-93). Their income from the markets used to cover our expenses. I learned about the markets from them. My first personal investment was when Zee TV went public (initial public offering) in 1993. I had invested €4,000 and it was €10,000 in two months, which I thought was phenomenal.
When I started my accountancy course, it was very clear to me that I didn’t want to study accounting, auditing or tax. It was clear to me that I wanted to go to the capital markets. I’ve had campus offers from a few companies including Hindustan Unilever and Marico. I remember Unilever offering me a package of €3 lakh per year which I consider to be one of the best deals at this point. I turned it down and joined the UTI Mutual Fund for a third of that salary because I wanted to get into the stock markets. My family was very upset about this because they thought it was a very stupid thing to be a Marwari.
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When did serious investing begin?
I didn’t have much money at the beginning of my life, but what little I had saved I invested in stocks. After joining UTI MF in 1997, I started investing seriously. I switched to equity research and then fund management. So that’s where I really started dealing with money. UTI MF was then the largest asset management company in India and was formerly the largest shareholder in most of the top 200-300 companies. Even though I was a freshman year, I was involved in the management of many top companies. Through my recommendations, I influenced fund managers’ portfolio decisions.
Eventually I became a fund manager, where I managed a large fund and significant amounts of money. I used to invest in direct stocks. However, when I came to UTI MF, it went into the funds of AMC.
After UTI MF you had a brief stint at Motilal Oswal Financial Services from where you moved to Rakesh Jhunjhunwala’s Rare Enterprises as a portfolio manager. How was this experience?
That was a phenomenal experience. I was part of the team that started Rare in 2001-2002. We actively traded the market and made long-term investments in public stocks. We have also done PIPEs (Private Investment in Public Equity). We only had two categories of funds in India at that time, private equity funds and public market funds. PIPE funds and mid-market funds did not yet exist in India at that time. So Rare was one of those places that ran public market investments, trades and PIPEs.
How was working with Rakesh Jhunjhunwala?
On one level, his knowledge, wisdom, and vision were truly incredible. On the other hand, he was a person who could have both a short-term and a long-term view of the same stock or company. And he could play both strategies in the same stock without mixing the two. So it’s like having multiple relationships with the same person without mixing the two. I think he was a gift from God because I haven’t met anyone in my 25-year career who can do both and be extremely successful at it. He also never allowed losses to dampen or affect his enthusiasm, spirit and confidence.
What made you decide to start your own wealth management company?
Starting my own business was a dream I had from the day I started my career. I tried to pack my life into four buckets. The first 20 years of my life were devoted to learning as a child, student and adolescent. For the next 20 years I worked as a professional in various organizations trying to learn the skill or art of investing. I am in the third 20-year phase of my life between 40 and 60 years active as an entrepreneur. In the fourth phase of my life I would like to spend my time as a hiker.
You say you’ll retire at 60?
As an investor, I can never retire. But today I run the business as a full-time investor and CIO. I plan to give up full-time responsibility in my fourth phase of life. But as an investor, you never give up the game.
Can you tell us about the programs you manage?
We have five existing funds in our PMS and AIF and are in the process of launching another PMS fund. Apart from these six, we also have a consulting portfolio on the Smallcase platform and we are very excited about this area. I think the consulting portfolios are going to be very large in the medium to long term and we’re already seeing good traction.
About the fund that is open we plan to close it €500 crore by the end of this month. It’s called BITS, which reflects the burgeoning digital economy in India. And it’s an acronym for the fund’s four underlying themes, namely Brand, Internet, Technology and Science. We believe in the adoption of technology. India ranks the same as the US in 2002 and over the next 20 years the Nasdaq ETF was the best performing fund, outperforming all active funds. We believe that the Indian internet sector is at an inflection point.
When it comes to alternative investments, we believe that India is at a tipping point, meaning that the equity fund industry was right there in 2000-2001 when all equity funds’ AUM was all €1 trillion. Today it has grown to around €18 trillion. I think this will also happen to the alternative investment industry.
Come to your personal portfolio. How are you invested?
I haven’t invested directly in stocks in the last 15-18 years, apart from some legacy investments. Now I invest my money in my own funds. On a personal level, I was a pure stock investor. I would say that 85% of my portfolio is invested in equities and 5% in cash from debt to meet short-term needs.
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