Chikara Investments, a UK-based specialist in investing in Japan, India and emerging markets, has launched the Chikara India Equity Fund for US investors, managed by Abhinav Mehra and Andrew Draycott.
The fund, which was launched with seed capital from diversified US family offices, is designed to mirror the strategy of the firm’s existing India equity UCITS fund, Chikara Indian Subcontinents Fund, which has grown assets under management to over $100 million this year.
The new Chikara India Equity Fund is a Cayman Islands based monthly traded long-only equity fund. The fund has no performance fees, does not engage in derivative transactions as part of its strategy and has an annual management fee of 50-100 bps.
The portfolio will include around 25-30 stocks, with the fund manager selecting high-growth, high-quality companies that are best positioned to benefit from India’s impressive domestic growth.
The fund’s investment approach is high conviction, index agnostic and heavily focused on companies that benefit from India’s robust domestic outlook. India’s growth story is well documented and its demographic trends are well known. India’s ageing rate is significantly lower than the global average and its GDP is expected to double to over $7.5 trillion by 2030.
This will make India the third largest economy after China and the United States.
Abhinav Mehra, co-manager of the new Chikara India Equity Fund and the Chikara Indian Subcontinent Fund, said: “The top-down macroeconomics are of course compelling. As GDP per capita rises from around US$2,500 to US$5,000, some companies in currently under-penetrated sectors such as insurance, mortgages and private healthcare should benefit disproportionately as affordability improves and penetration rises, growing faster than the 7% growth rate projected for India itself.”
“In these domestic sectors, we select companies with strong governance that we have known for many years and who we are comfortable entrusting with our client’s capital. In our view, this is a once-in-a-generation economic transformation and we believe we can leverage this to benefit US investors by providing them access to this underserved secular element of the India growth story.”
James Tollmash, chief executive officer at Chikara Investments, said: “Many investors talk about exposure to domestic growth in India, but this portfolio certainly offers investors pure exposure. Most of the income in this portfolio is generated domestically, not from export earnings, and this is what makes the Chikara India Equity Fund differentiator in the market.”
“By launching this fund, we have responded to a clear interest and demand from US investors. They already have ample exposure to global and US growth in their portfolios, including the big seven funds, but this fund offers something different by tapping into India’s under-penetrated domestic-focused high-growth story. The Chikara India team’s proven strategy looks different from any other fund in the region.”
In addition to its India equity strategy, Chikara Investments also manages a Japanese equity fund through the Chikara Japan Income and Growth Fund, managed by Richard Aston, and investment trust CC Japan Income and Growth. In late 2023, the firm launched the long-only Chikara Global Emerging Markets Opportunities Fund, managed by Jonathan Assante and his team, as a sub-fund of its existing Irish UCITS product.
