How to Invest in Global Alternative Assets?

PMS Bazaar recently organised an exclusive NRI webinar titled “The Ease of Investing in Global Alternatives: The Abans Way.” It featured Bhavik Thakkar, CEO of Abans Investment Managers. This blog covers multiple topics including the intricacies of arbitrage funds, understanding fee structures and regulatory compliance to optimise returns and clarity on cross-border investments.

Key aspects covered in this webinar blog are:

Arbitrage Funds: Maximising returns while minimising risks
Investing across borders: Exploring opportunities for global investors
Factors influencing fund performance
Learning from market cycles
Insights into Abans Group

Arbitrage Funds: Maximising returns while minimising risks

Arbitrage funds serve as a strategic avenue for investors to exploit price inefficiencies across markets, presenting a nuanced approach to potential returns. Thakkar delves into the complexities of these funds, assuaging concerns regarding fee structures and their impact on overall returns. While acknowledging the presence of subscription and management fees, Thakkar underscores that returns are calculated net of these expenses. He highlights that flexibility in fee arrangements and the standardised nature of management fees contribute to a stronger belief in the feasibility of arbitrage funds as vehicles for generating returns, even within shorter investment horizons.

Furthermore, Thakkar stated that investors must view these fees as integral components of the investment landscape, with the potential for returns to surpass associated costs over time. By elucidating the importance of understanding fee structures, he underscores their role in optimising returns while mitigating risks. Through a comprehensive understanding of fee dynamics, investors can make informed decisions, leveraging arbitrage funds to enhance their investment portfolios strategically.

Investing across borders: Exploring opportunities for global investors

Investing in global markets presents a myriad of opportunities and challenges for global-based investors. Thakkar provides clarity on the various avenues available for those looking to enter the Indian market. He elucidates the procedures and considerations involved, whether through NRE or NRO accounts or direct investment. By highlighting the accessibility and ease of investing, Thakkar empowers global investors to navigate the complexities of cross-border investment with confidence.

Moreover, he emphasises the consistency of fee structures and regulatory compliance, ensuring a seamless investment experience for global investors. Thakkar's insights offer valuable guidance for global investors seeking to diversify their portfolios and capitalise on opportunities in the Indian market. By addressing regulatory requirements and fee structures effectively, he enables investors to make informed decisions and optimise their investment strategies.

Factors influencing fund performance

Understanding how different factors influence fund performance is important for investors who want consistent returns. Bhavik Thakkar discusses how market cycles affect fund performance. He explains that arbitrage funds, which exploit price differences between markets, can sometimes underperform due to market volatility and changing investment strategies. However, Thakkar argues that this underperformance needs to be considered in the context of market cycles and overall fund management principles.

One important principle is the stability, liquidity, and return (SLR) framework. This framework emphasises investing in stable assets with low volatility to minimise risk. It also highlights the importance of liquidity, which allows for easy buying and selling of investments without affecting prices. Finally, the framework considers return, aiming to optimise returns while maintaining stability and liquidity.

By following the SLR principles, fund managers can navigate market fluctuations and reduce the impact of volatility on performance. This approach prioritises steady returns over high-risk strategies, which aligns with investors' long-term goals. Thakkar recommends a patient and disciplined approach to investing, especially during uncertain market times.

Learnings from market cycles

Market cycles also significantly impact investment outcomes. These cycles, characterised by periods of expansion, peak, contraction, and trough, are a natural part of investing. Understanding these cycles allows investors to anticipate market movements and make informed decisions to capitalise on opportunities and manage risks.

Thakkar's expertise also covers navigating cross-border investments. He explains the different ways global investors can enter the Indian market, such as through NRE or NRO accounts or direct investment. By providing clear information on procedures, regulations, and fees, Thakkar empowers global investors to diversify their portfolios and benefit from opportunities in the Indian market.

Finally, Thakkar highlights the consistent fee structures and regulatory compliance that ensure a smooth investment experience for global investors. This focus on transparency and following regulations reflects Thakkar's commitment to facilitating cross-border investments and building investor confidence in global markets.

Insights into Abans Group

Thakkar also offered insights into Abans Group's origins, evolution, and diverse investment portfolio. It was founded in 2005, excelling in proprietary fund management, and seizing opportunities from commodity markets in India and around the world. The group then broadened its scope by acquiring licenses to operate as a broker and by establishing offices in financial centres like London and Mauritius. They now offer both brokerage and fund management services. Notably, they expanded into India's non-banking financial sector, further diversifying their offerings.

Abans Group offers three main investment options: a Global Arbitrage Fund, Portfolio Management Services (PMS), and Structured Products. They focus on compliance with regulations and highlight the effectiveness of their arbitrage strategies, which have delivered steady returns for over seven and a half years. He emphasised their focus on long-only equity portfolios. Their investment philosophy emphasises qualitative and quantitative filters, prioritising earnings quality, growth, and capital efficiency.

Bhavik Thakker covered all the topics mentioned above in-depth and answered questions from the audience toward the end of the session. For more such insights on this webinar, watch the recording of this insightful session through the appended link below.