Sandip Agarwal,Partner Principal Officer& Fund Manager, Sowilo Wealth Enhancer

As financial markets continue to evolve in an era marked by economic uncertainty and technological disruption, the role of professional portfolio management services has become increasingly critical. Investors today are cautious about where to allocate their assets while seeking tailored solutions that can navigate the complexities of modern finance. Amidst fluctuating interest rates, mixed global economic indicators, an increasingly volatile investment environment, and an increased number of complex, new-age and niche businesses, the demand for portfolio management has never been more pronounced. This demand for customization has been a driving force behind Sowilo’s approach to portfolio management, emphasizing the need for agility, foresight, and a deep understanding of individual client needs.

Sowilo is a portfolio management service provider dedicated to delivering investment strategies that align with clients’ financial goals and risk profiles. The company provides investment strategies, ensuring a balanced approach to wealth growth and preservation. It systematically conducts client profiling, ensuring that the company does not accept client funds without thorough understanding. Operating in the portfolio management services segment, the regulator mandates a minimum investment cap of INR 50 lakh, attracting clients generally well-versed in investments.

The pre-existing awareness among clients is advantageous for the firm. The company delves into the client’s profile to understand when they might need the money and the purpose behind their investment. The process includes assessing whether clients are seeking trading gains or long-term investments. “We are cautious about accepting funds from individuals for whom INR 50 lakh is their sole financial cushion,” says Sandip Agarwal, Partner and Fund Manager at Sowilo. Such situations could lead to premature redemption during market volatility, resulting in potential capital erosion, which the company aims to avoid. It selectively accepts clients who have substantial financial reserves and a solid understanding of equity investments, focusing on those committed to long-term investment horizons of 10, 20, or 30 years, rather than short-term gains.

The long-term focus is not merely a strategic decision but a core philosophy that permeates every aspect of Sowilo’s operations. The company’s approach to portfolio management is akin to the meticulous process of diamond mining—a painstaking search for rare and valuable assets in a field where the ratio of successful companies to unsuccessful ones can be as high as one to fifty. The analogy underscores the difficulty of identifying companies that have the potential to deliver substantial returns over time, often referred to as ‘100 baggers’ or ‘200 baggers’ in investment parlance.

Agarwal draws on his extensive experience in the financial industry, including an 11- year tenure at Edelweiss (now known as Nuvama), where he covered sectors like telecom, media, and technology, which constitute a significant portion of market indices. His deep understanding of these industries, coupled with his hands-on experience in building financial models and interacting with company management, has been instrumental in shaping the company’s research-driven approach.

Research-Centered Investment Strategies

Since its inception, the company has prioritized building a robust research team capable of identifying investment opportunities that can generate significant alpha over the long term. The focus on research quality and team expertise sets it apart in an industry crowded with PMS and Alternative Investment Fund (AIF) providers. Sowilo’s research team is not just tasked with identifying lucrative investment opportunities but is also responsible for ensuring that these investments align with the company’s long-term growth strategy. The approach minimizes portfolio churn, as it typically holds onto investments unless exceptional circumstances, such as management changes or unforeseen challenges, necessitate a sale.

The team follows a systematic and rigorous approach to client onboarding and investment decision-making. Potential clients are typically brought in through references rather than public solicitation, ensuring a thorough understanding of each client’s profile before onboarding. The detailed profiling process and a robust digital onboarding system ensure a seamless experience for new clients. In addition, clients have access to comprehensive software tools that provide detailed insights into their portfolios, industry exposures, and individual stock performance. Regular reports and open channels of communication further enhance client engagement and satisfaction.

Sowilo’s disciplined approach is particularly relevant in the current market environment, where the biggest challenge for portfolio managers is not simply generating returns but doing so in a way that is sustainable and aligned with clients’ long-term financial goals. “In the current bull market, it’s easy to generate returns, but the real test will come when markets are tough. That's when our focus on quality companies and long-term value creation will truly differentiate us," says Sandip. The emphasis on building a resilient portfolio today, designed to weather future market downturns, is what Agarwal believes will set the company apart in the years and decades to come.

The company plans to venture into the Alternative Investment Fund (AIF) space, where the minimum investment requirement is INR one crore. The move would allow them to leverage a range of instruments to hedge clients’ risks and optimize returns beyond the currently permissible listed equities under the SEBI’s Portfolio Management Services (PMS) regulations. The company’s approach has always been measured and research-focused rather than aggressively marketing its products. Sowilo believes in identifying and investing in high-quality businesses, akin to mining diamonds, where only a fraction of companies prove profitable.