30-40% correction in small & midcaps inevitable

Portfolio management services providers, Marcellus Investment Managers saw its assets under management drop 64%—from ₹12,700 crore to ₹4,700 crore—in three years.

- Saurabh Mukherjea, Founder & Chief Investment Officer, Marcellus Investment Managers

Founder and chief investment officer Saurabh Mukherjea tells Nesil Staney the reasons behind the heavy erosion in its portfolio. He also speaks about the regulatory environment for PMS firms. Excerpts:

What are the best-performing funds of Marcellus?

In 2022, we built a team to invest in developed markets, and it launched the Global Compounders Portfolio in October that year. The portfolio has compounded at 24.09% in INR terms net of all fees and costs, compared with returns of 17.66% for the benchmark.

We also built a team that would apply quantitative techniques to our house philosophy of investing in clean and well-managed companies available at sensible valuations. In November 2022, that team launched the MeritorQ portfolio, which has delivered 16.56%, versus 15.55% for the benchmark.

Your fund’s AUM dropped 64%—from ₹12.7k crore to ₹4.7k crore—in three years. Why?