PicoBlog

It was such an honour to get to hear from Pulak Prasad for our session titled “Buy a Company You Don’t Need to Sell”. Pulak is the founder of Nalanda Capital, a Singapore-based firm that invests in listed Indian equities and manages about $5 billion. He was previously the co-head of India for Warburg Pincus, a global private equity firm, and also worked at the management consulting firm McKinsey for several years.

Describing Pulak's journey and approach to investing, his perspective offers a breath of fresh air amidst the common narrative surrounding investment strategies. In contrast to the prevailing belief that successful investors thrive on high-risk, high-reward opportunities, Pulak's philosophy underscores the importance of prioritizing risk management above all else.

Pulak advocates for a cautious and discerning approach, emphasizing the significance of avoiding investments with excessive risk or uncertainty. One notable aspect of Pulak's approach is his aversion to companies burdened with significant financial leverage. By avoiding companies heavily reliant on leverage, Pulak mitigates risk exposure and prioritizes the preservation of capital.

Moreover, Pulak's preference for industries characterized by stability and predictability, such as the paint industry, speaks to his pragmatic approach to investing. By focusing on sectors with proven track records and dependable performance metrics, he minimizes uncertainty and enhances the likelihood of sustainable returns.

Overall, Pulak's perspective offers a valuable reminder that success in investing is not necessarily synonymous with taking outsized risks. Instead, it stems from astute risk management, disciplined judgment and adherence to fundamental principles. Let us hear more reflections about Pulak’s sharing from our members who attended the session.

Z Club Academy,

Pearline PANG

Yesterday’s session with Pulak left me with a profound takeaway: 'Own a good business forever; don’t hold a stock for the long term.' Previously, I hadn't considered investments in such a holistic manner, but Pulak's successful career trajectory and insightful vision have sparked a realization within me. I now understand the importance of being a Value Owner rather than just a Value Investor. With a deep commitment to ESG (Environmental, Social, and Governance) issues, I firmly believe that every investor bears responsibility for their investments, as they reflect personal values and beliefs in a company.

Embracing Pulak’s concept of 'ownership' requires a shift in perspective, urging investors to delve deeper into a company's long-term operational strategies rather than merely focusing on short-term metrics like growth rates or revenues. This approach, although potentially less immediately profitable, holds greater promise for sustainable returns over time. It begs the question: What type of investor do you aspire to be — solely profitable or also responsible? Fortunately, numerous companies offer the opportunity to embody both ideals.

Pulak’s visionary approach to 'ownership' extends Warren Buffet's theory of value investing and has earned him well-deserved respect in the investment community. With a portfolio boasting ownership of over 21 businesses valued at $5 billion AUM over the past decade, Pulak exemplifies how financial success and ethical investing can harmoniously coexist.

Furthermore, Pulak’s journey underscores the importance of curiosity and passion in one's career trajectory. Transitioning from engineering to finance, he exemplifies how anyone can embark on an investor journey fueled by curiosity and enthusiasm — a sentiment echoed by our Z Club. Pulak also emphasizes the significance of cultivating a supportive work environment that nurtures personal growth and fulfilment, a sentiment I wholeheartedly endorse based on my own experiences.

In summary, the 17th March Z Club Academy provided invaluable insights into the multifaceted nature of investment journeys, both personally and theoretically. I extend my gratitude to Pulak for his invaluable contributions and to the Next Gen team for organizing such enlightening discussions.

Z Club, VIP Southeast Asia Chapter

Claire CONTRI

Founder of Nalanda Capital, Mr Pulak Prasad, shared about his investment journey and investing strategies! Originally from consulting at McKinsey & Co., he made a transition to investing when he realised that he had the passion and temperament for doing investments. Today, he manages over $5 billion. I learnt that Mr Prasad abides by certain key principles, intending to be a permanent owner of high-value businesses at a fair price. Through his sharing, I would like to reflect on three key points that I felt have provided me with valuable takeaways, namely, rejecting investments, emphasising firms with little to no leverage and maintaining belief in the fundamentals of a firm.

Firstly, I learnt the value of being able to set and abide by the criteria we believe in when we pick investments. Such criteria might even include disregarding firms with any debt, only investing in firms in certain countries and even refraining from investing in subsidiaries. By focusing on only certain firms that pass his criteria, Mr Prasad successfully managed to hold on to a set of investments he truly believes in, while seeing gains over the many years. Curating criteria and having the discipline to abide by them would help us invest according to our personal preferences and encourage a targeted and sustainable investing strategy.

Next, I saw the value of limiting investments to firms with no leverage at all. While some might elude the trade-offs of firms not utilising debt in their capital structure, Mr Prasad sees great value in terms of how such a capital structure drastically minimises the risk of a firm’s bankruptcy. Thereafter, we can be more at peace with our investments, knowing that those firms will highly likely continue to persist, especially amid volatile economic conditions. This would also facilitate a sustainable long-term investing strategy.

Lastly, Mr Prasad shed light on how he was able to continue holding on to his investments despite times of difficulty, and how they bore fruit. I look up to his unwavering beliefs and mindset regarding the value of his investments which enabled him to stand fast even during the COVID-19 pandemic where the prices of some of his stocks might have dropped, but thereafter continued back on to their upward trajectories. By maintaining broad oversight of circumstances, we could work towards even higher gains in the farther future.

In all, I gained significant insight into his long-term investing methodologies! I greatly enjoyed learning about how we might work towards such a strategy and the value of staying true to what we truly believe in.

Z Club, VIP Southeast Asia Chapter

Sarah HENG

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