Quantum Advisors' PMS: A Steady Rise To $3 Billion

The firm’s portfolio management scheme is one of the biggest in the Indian market, and long-term foreign investments continue to pour in

- Pravin Palande

The conventional way to build a trusted financial advisory company is by first cultivating faith in the local market, and then selling its advisory to foreign clients. But in the case of Quantum Advisors, founded by Ajit Dayal, 56, in 1990, the process has been in reverse order. The company began as an advisory for foreign institutional investors (FIIs) and then started its mutual fund (MF) business. And while the MF business is still small, the advisory business, now a portfolio management scheme (PMS), manages $3 billion as of September 30, 2017. Though the PMS business is not tracked by analytics agencies, several leading market experts call Quantum one of the biggest in the listed equities space; the other big PMSes are in the range of $2-2.5 billion, and belong to the likes of the ASK Group, Enam Asset Management Company and Motilal Oswal.

“What has worked for us in the PMS product is the investment process. We follow deep value investing that is appreciated by our clients. We are conservative in frothy bull markets. We have always kept away from temptation,” says IV Subramaniam, 55, managing director and CIO, Quantum Advisors. The PMS targets long-term FIIs, including pension funds and university endowments.

Subramaniam, who runs operations while Dayal has adopted a mentor like role, has a contrarian investment philosophy and approach. While competitors look at fast-growing companies, Quantum, he says, follows a value-investing strategy that looks for and invests in traditional and fundamentally strong companies that are typically out of favour in the market. This means, the fund may not benefit during bull markets, during which rivals make high returns.

But what gives Quantum an edge, says Subramaniam, is that its PMS falls by a smaller level when the markets collapse, and also recovers fast.