Investing Lessons from Kotak Mahindra AMC . Nilesh Shah

Buy a business as if you won’t look at it in 10 years. “This advice from investment expert Warren Buffet is still a guideline for Nilesh Shah where it relates to his investments. Shah, managing director at Kotak Mahindra Asset Management Company Ltd.

Like many CEOs and senior executives of companies, the majority of Shah’s richness, is also bound to his master. Much of his personal wealth (60%) is in equity — either in employee stock options (ESOPs) or Kotak Mahindra Bank shares that he bought a long time ago. (He also owns some of the shares in physical form so he won’t be tempted to sell them.)

Another 15% of his assets are held in equity mutual funds, mainly in the large and mid-cap and mid-cap segments. Shah does not invest in passive funds, except as required by regulations of the Sebi market regulator. According to these regulations, as CEO of Kotak Mahindra AMC, Shah must invest in all fund house plans. But these rules only go into effect in October 2021, and so such mutual fund (MF) units are only a tiny fraction of Shah’s portfolio. Interestingly, Shah relies on a distributor to transact in multi-function credit institutions rather than choosing packages directly.

“I don’t do proactive asset allocation due to the limitations of the job. I am a long term investor by default. However, I would recommend investors to do aggressive asset allocation if they have some flexibility,” he said, citing his ‘buy and hold’ approach to the constraints of the job. and his need for time.

Even as Nilesh Shah has amassed his fortune in equity, he feels particularly unlucky with real estate. “I must have given crypto assets at least 6-7 times in my life and each time the deal didn’t work out.” About 15% of Shah’s personal wealth is in real estate. This amount includes his main residence and assets. bought in the suburbs of big cities to have a stable rental income. “I buy real estate in places where the city is going to grow,” he told the Mint, adding that he prefers commercial real estate over residential.

As for his main residence, he often wishes he had taken his wife’s advice and spent more money on it. “She told me you shouldn’t try to haggle when it comes to the house we live in, and she was right about that,” he added.

Shah has a small allocation to debt (8% of his portfolio) but this is mostly his emergency assets and the money is held in short-term funds, waiting to be used to execute ESOPs. . He doesn’t rely on it for a regular income.

The Shah has a very small allocation to gold (2% of assets). However, he is looking to increase this. “I invested in gold like my mother told me to buy for my daughters. I would look forward to increasing my allocation to gold through Sovereign Gold Bonds (SGBs) as I believe central banks around the world will look to invest in gold once Russia’s foreign exchange reserves are closed. ice,” he said.

When asked about his days off, Shah recalled a pivotal moment in his life. “My wife is a great planner. When we got married, we went on a honeymoon on a tight budget. We both then promised each other that we would celebrate our silver anniversary without any budget constraints. God has been good to us, and we can redeem our pledge,” he said.

“Wealth means the ability to follow Varnashrama (the four stages of an individual’s life according to the Hindu ashram system). My job earns me a decent amount of money and also helps earn the goodwill of my investors,” he added.

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