The absolute return strategy employs a systematic and quantitative trading approach to the Indian and Asia-Pacific equity derivatives markets which Monsoon Capital believes are dominated by beta-driven, long-biased investors, leaving opportunity for systematic traders. The strategy exploits the strong trends, high volatility and enduring price inefficiencies which results from the relatively high retail participation prevalent across much of the Asia-Pacific region. The strategy applies several dozen proprietary short-term trading systems to the most liquid equity derivatives markets in the Asia-Pacific region. These systems are designed to have low correlations with one another and are risk-weighted to reduce portfolio drawdowns. The strategy dynamically and rapidly adjusts daily net exposure to exploit changing market conditions and tail events and to generate uncorrelated alpha. The strategy therefore provides strong portfolio diversification benefits as well as tail risk insurance and high liquidity.
The long-only strategy employs a “liquid private equity” approach to the small/mid cap publicly-traded Indian equity market. The strategy seeks to build a concentrated portfolio of secular growth businesses with scalability potential, high execution capability, attractive fundamentals and reasonable valuations. The strategy invests across all sectors, focusing on the over 600 listed small/mid caps stocks in the $100 million - $2 billion market capitalization range. Given the private equity investment style, the strategy utilizes fundamental research and deep, bottom-up company due diligenceto construct a relatively concentrated portfolio of companies with a multi-year holding period.
The real estate strategy primarily pursues early stage mid-market residential housing projects in the emerging suburbs of the eight largest metropolitan cities in India. Monsoon Capital generally invests alongside local mid-sized real estate developers who have passed strict screening criteria. Monsoon Capital prefers to invest at the land acquisition stage to maximize upside while mitigating the higher development risks through active involvement in each project.