Home Alternative Investments Why Renaissance’s Pankaj Murarka is a long-term, patient investor

Why Renaissance’s Pankaj Murarka is a long-term, patient investor

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Pankaj Murarka.

In this Guru Portfolioseries, Pankaj Murarka, a 25-year veteran of the investment industry, talks to Mint about his financial journey, how he started Renaissance, and his experience of working with investment guru, the late Rakesh Jhunjhunwala. Edited excerpts:

How did your financial journey begin?

I got fascinated with stock markets during my early college days. Some of my friends used to invest in stock markets and this was post the Harshad Mehta market crash (1992-93). Their earnings from the markets used to take care of our out-of-pocket expenses. I got to understand from them about the markets. My first personal investment was in the IPO (initial public offer) of Zee TV in 1993. I had invested 4,000, and it became 10,000 in a matter of two months, which I thought was phenomenal.

Once I got into my chartered accountancy course, I was very clear that I didn’t want to pursue accounting, auditing, or taxation. I was clear that I wanted to get into the capital markets. I had campus offers from a couple of companies, including Hindustan Unilever and Marico. I remember Unilever offering me a package of 3 lakh per annum, which I consider to be among the best offer at that point in time. I declined that and joined UTI Mutual Fund at one-third of that salary because I wanted to get into the stock markets. My family was really upset about it because they thought that being a Marwari, it was a very foolish thing to do.

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When did serious investing start happening?

At the early stage of my life, I didn’t have much money, but whatever little I used to save, I invested in equities. Serious investing happened after I joined UTI MF in 1997. I went into equity research and then moved to fund management. So, that is where I seriously started managing money. UTI MF in those days was the largest asset management company in India and it used to be the largest shareholder in most of the top 200-300 companies. So despite being in the very first year, I was engaging with the management of a lot of the top companies. Through my recommendations, I was influencing the portfolio decisions of fund managers.

Eventually, I became a fund manager where I was managing a large fund and significant amount of money. Earlier, I used to invest in direct stocks. However, once I joined UTI MF, it was into the AMC’s funds.

After UTI MF, you had a small stint with Motilal Oswal Financial Services, from where you joined Rakesh Jhunjhunwala’s Rare Enterprises as a portfolio manager. How was that experience?

That was a phenomenal experience. I was part of the team that set up Rare in 2001-2002. We were actively trading in the market as well as doing long-term investing in public equities. We were also doing PIPEs (Private Investment in Public Equity). We only had two categories of funds in India then, private equity funds and public market funds. PIPE funds and middle market funds were not there in India back then. So Rare was one of those places which were doing public market investing, trading and PIPEs.

How was the experience working with Rakesh Jhunjhunwala?

On one level, his knowledge, wisdom and foresight were really incredible. On another, he was a person who could have both a short-term and a long-term view on the same stock or a business. And he could play both the 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 had a gift of god, because I’ve not come across anyone else in my 25 years of career who can do both, and then being extremely successful at it. He also never allowed losses to impact or influence his enthusiasm, spirit and confidence.

What motivated you to start your own investment management firm?

Starting my own venture was a dream I had from day one when I started my career. I’ve tried to put my life into four buckets. The first 20 years of my life was dedicated to learning as a child, student and youth. The next 20 years, I worked as a professional across organizations, trying to learn the skill or the art of investing. I’m in the third 20-year phase of my life, between 40 and 60 years of age, where I am an entrepreneur. During the fourth phase of my life, I want to spend my time as a wanderer.

You’re saying that at 60, you will retire?

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 the full-time responsibility during the fourth phase of my life. But as an investor, you never give up the game.

Can you take us through the schemes that you manage?

Across our PMS and AIF, we have five existing funds, and we are in the process of raising one more PMS fund. Apart from these six, we also have an advisory portfolio on the Smallcase platform, and we are very excited about this space. I think advisory portfolios will become very large on a medium to long-term basis and we are already seeing good traction.

About the fund, which is open, we plan to close it around 500 crore by the end of this month. It’s called BITS, which reflects the rising digital economy in India. And it’s an acronym for the four underlying themes of the fund, which are brand, internet, technology and science. We believe in the adoption of technology. India is at the same place where the US was in 2002 and over the next 20 years, Nasdaq ETF was the best performing fund outperforming all active funds. We believe India’s internet sector is at an inflection point.

When it comes to the alternative investment industry, we believe that India is at an inflection point, meaning it’s exactly where the equity mutual fund industry was in 2000-2001 when the total AUM of all equity mutual funds was at 1 trillion. Today it has grown to around 18 trillion. I think this will happen to the alternative investment industry too.

Coming to your personal portfolio. How are you invested?

I have not been investing in stocks directly for the last 15-18 years, except for a few legacy investments. Now, I invest my money in my own funds. At a personal level, I’ve been an equity investor totally. I would say 85% of my portfolio is into equities and 5% into debt liquid funds for meeting short-term requirements.

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