UK-based Japan, India and Emerging Market investment specialist, Chikara Investments has launched the Chikara India Equity Fund (the “Fund”) for US investors, which will be managed by Abhinav Mehra and Andrew Draycott.
Launched with initial funding from a diverse group of family offices in the US, the Fund is designed to mirror the strategy of the company’s existing India equity UCITS fund, the Chikara Indian Subcontinent Fund, which has grown in AUM to over USD $100m this year.
The new Chikara India Equity Fund is a Cayman-domiciled, monthly-dealing, long-only equity fund. The Fund has no performance fee, does not trade derivatives as part of its strategy and applies an annual management charge of between 50 and 100bps.
The portfolio will hold approximately 25-30 stocks, with the fund managers selecting high-growth and high-quality companies optimally positioned to benefit from India’s impressive domestic growth.
The Fund’s investment approach is high conviction, index-agnostic, with a concentrated focus on companies benefiting from India’s robust domestic prospects. The India growth story is well-documented, the demographic trends well known; India’s age dependency is significantly lower than the world average, and its GDP looks set to double to more than $7.5 trillion by 2030.
This will make India the third largest economy behind China and the US.
Abhinav Mehra, co-manager of the new Chikara India Equity Fund, and Chikara Indian Subcontinent Fund, said: “The top-down macroeconomics are, of course, compelling. As GDP per capita grows from approximately USD $2,500 towards USD $5,000, some companies in currently underpenetrated sectors such as insurance, mortgages and private healthcare should benefit disproportionately and grow faster than the 7% growth predicted for India itself as affordability improves and penetration rates rise.
"Within those domestic sectors, we select companies with stringent governance in place that we have known for many years and are confident entrusting client capital to. In our view, this is a once in a generation economic transition that we aim to capitalise on and believe will be fruitful to US investors, providing them access to this under-served and secular element of India’s growth story.”
James Tollemache, chief executive of Chikara Investments, said: “Many investors talk about being exposed to India domestic growth, but this portfolio is without question giving investors that pure play exposure. Most of the revenue in this portfolio is generated domestically rather than from export earnings, which really differentiates the Chikara India Equity Fund in the market.
“In launching this Fund, we have responded to clear interest and demand from US investors. They have plenty of exposure to global and US growth in their portfolios already, not least the magnificent seven, but this Fund tapping into India’s under-penetrated domestic-focussed high-growth story provides something different. Chikara India team’s proven strategy appears to be unlike any other fund in the region.”
Alongside the India equity strategies, Chikara Investments manages Japan equity funds through the Chikara Japan Income and Growth Fund, and the investment trust CC Japan Income and Growth, both managed by Richard Aston. The firm launched the long only Chikara Global Emerging Markets Opportunities Fund (a subfund of the existing Irish UCITS product) managed by Jonathan Asante and his team at the end of 2023.
