Emkay to launch Rs 500 cr small cap AIF

MUMBAI: Emkay Investment Managers, an arm of the leading institutional brokerage Emkay Global, is launching a Rs 500-crore alternate investment fund focused on small-caps.

The proposed fund is the fourth of the Emkay emerging stars fund, which is a category III AIF and has so far returned 110 per cent to investors since the launch a year ago.

“We are launching the fourth series of our emerging stars fund, which manages assets of over Rs 600 crore now. The new fund will have a corpus of Rs 500 crore, and will be launched on July 2, Krishna Kumar Karwa,” the founder and managing director of

, told PTI on Tuesday.

Overall, the AIF manages around Rs 750 crore, including the small cap fund along with Rs 300 crore PMS, he said, adding the three existing series of the fund has returned around 110 per cent since the launch.

The new fund will have a three-year life, and a one-year lock-in and will invest in the best 20-odd stocks in the Nifty midcap index, but those with a focus on the China Plus 1 theme and also those getting/will get the benefits of the production-linked incentive (PLI) scheme, Karwa said.

On the markets, he expects the record rally to continue on the back of the better than expected recovery of the overall economy thanks to the better managed lockdowns, and also very strong earnings by most of the large companies in almost all sectors especially cement, metals, software, pharma and healthcare among others. But re fused to offer an index target saying market has to be approached with a minimum two year horizon.

He expects the rally to be sustained also because it’s broad-based as even the PSU, midcap and small cap indices are also rallying now.

The present rally is also supported by ample liquidity from domestic funds, which had in May hit a 14 month high after seeing heavy outflows through the whole of the past year.

Another support is the huge liquidity coming in from bank/small savings to the equities as deposit rates have been steadily falling.

This was also evident from the opening of over 1.2 crore retail demat accounts in the past 12 months alone. This has taken the share of the retail investors to over 70 per cent of the cash market in June, which was just about 40 per cent this time last year, Karwa said.

However, he was quick to add that if there is a third wave of the pandemic, which is being feared now and a tighter lockdown, then there could be some correction in the market.

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