Carnelian MF, one of the latest entrants into the mutual fund business, will debut with the launch of its first-ever new fund offer (NFO) in the small-cap space.
The fund will identify businesses with sustainable earnings growth, durable competitive advantages and attractive risk-reward characteristics, while remaining disciplined on valuations.
The scheme will have a cap of ₹5,000 crore, subject to the terms specified in its offer documents.
The cap is intended to preserve agility in portfolio construction and enable the investment team to remain selective as the fund grows, prioritising investment opportunities over asset gathering.
Carnelian Asset Management will be the 56th fund house to enter an industry with asset under management (AUM) of about ₹80 lakh crore.
Vikas Khemani, Founder and Chairman, Carnelian Asset Management & Advisors (Sponsors of Carnelian MF), said the investment philosophy of the fund house rests on understanding businesses, conviction in investment decisions and a long-term perspective on compounding.
This approach combines fundamental research, forensic financial analysis and ground-level validation to evaluate both potential upside and risks, he said.
While the valuations in the small cap space are higher, he added the objective is to identify businesses where fundamentals and valuations support a compelling investment case.
The NFO opens for subscription on October 16.
Rajkumar Dhiman, CEO, Carnelian Mutual Fund, said small-cap investing offers a broad opportunity set, but demands discipline in evaluating businesses and constructing portfolios.
“The fund will keep the portfolio nimble and focus on generating alpha from quality investment opportunities,” he added.
The scheme plans to build a focused portfolio of about 30-50 companies from an initial universe of over 1,000 stocks.