Ahmed Khan

Healthcare in India has quietly shifted. What was once a mission-led sector is now a PE-owned asset class. Most of the country’s leading hospitals are no longer promoter-led. They are backed by Private Equity funds chasing scale and returns. Temasek → Manipal Hospitals (MHEPL) Blackstone → CARE Hospitals, Quality CARE India Limited CVC / KKR → HealthCare Global General Atlantic → Ujala Cygnus Hospital KKR → Baby Memorial Hospitals This shift has undeniable positives: capital inflows, modern infrastructure, global best practices. But it also hardwires ROI targets into an industry built on empathy. And the trade-offs are visible: - Profitable procedures prioritized over basic care - Luxury patient experiences over affordability - Operational efficiency over emotional connect The sector needs growth capital - no doubt. But when healthcare becomes just another asset class, we risk eroding its very core: quality and accessibility for all. The question: Can we let healthcare become just another profit-driven asset class… without eroding its core - quality and accessibility for all? #india #healthcare #privateequity #growth #funding #asset

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Rock and a Hard Place 80% publicly listed BDCs are currently trading at a discount to their NAV. BDCs are required to distribute at least 90% of their taxable income as dividends, which limits their ability to retain earnings for growth. If the share price is below NAV, issuing new shares becomes dilutive to existing shareholders, so funding new loans is limited. For sub-scale BDCs, this creates a difficult dilemma: they face limited ability to grow and participate in new lending opportunities. In such cases, managers often find themselves caught between a rock and a hard place. Including the large quarterly dividends (average payout rate is 11.7%) y-t-d performance is negative for 2/3rds of BDCs as shown in the chart below: negative 7.99% return y-t-d (high dividend payouts are more than offset by the decline in price). BDC share prices ~15% lower when the S&P 500 is up 14% y-t-d. BDCs with “bad PIK” (loans accruing, but not paying interest due to deterioration in cash flow), loan amendment to avoid impairment (kicking the can), increase in non-accruals, 2x leverage, 2nd Lien loans exposure, and poor liquidity have led to poor share price. Within the Top 10 publicly listed BDCs, two are trading at a discount to NAV of 32% and 58%, respectively. Hats off to the 20% club, those BDCs that are growing, originating new loans, and performing well (Ares leads the pact as the largest BDC manager, while Main Street has the highest price-to-book value) - these BDCs are well positioned to grow. BDC managers (REITs too) disdain when shares trade below NAV, since markets view their company in negative light; growth and higher fee income is important, if shares trade below NAV any share that is sold below NAV is dilutive for existing shareholders. Under the Investment Company Act of 1940, BDCs are generally prohibited from issuing shares below NAV without explicit annual shareholder approval. When loan performance is poor, incentive fees and moral obviously suffer. Takeaways: 1. Invest with top quartile managers should always be the goal, it is true for private and public markets. 2. The variance of realized outcomes is greatly magnified in the public markets for private credit managers (BDCs) vs closed end funds à closed-end funds have ~25 lower volatility vs. BDCs. 3. Alpha is derived from mitigating loan losses; the goal is zero default while the average manager experiences roughly ~100bps annual loss rate.

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Sizes that outsize! It is not uncommon to find concerns around fund sizes and hence their commensurate performance. This ostensible concern makes us look for sleeker options backed by relatively recent performances (due to their low ageing) and with the rationale that these have a long runway to cover before their chopper like structure turns into a Boeing! So till then, it's all good Going! Though what gets conveniently ignored is the velocity of market expansion that vindicates outsized funds. However, the overarching statistic that reflects the fund's ability to stomach market oscillations over decades and yet deliver outsized returns gets masked by fancier and newer names. Lest I forget the commercials. Many a times what is clinical in theory doesn't work in entirety, when it comes to hitting the ground hard and running. This is not to say that smaller sized funds haven't delivered or do not old the promise to swell into Boeings tomorrow. Hence it is prudent to have a mix of schemes based on sustainable performances. 'What has worked thus far will continue to work far!' And if it doesn't as an exception, there is always a recourse available in the form of reviews. Therefore, the challenge is in staying away from half found truths that translate into biases. A cursory glance at the table below by Value Research shows the kind of exceptional performance rendered by select schemes over time periods. Of course this is just the gist. The actual list of relatively larger schemes that boast of outsized returns runs much longer.

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What if your fund manager could make you money even in a bear market? Now they can. Markets don’t move in straight lines. But we’ve only had “up-only” investment options for retail investors through MF. That just changed. SEBI introduced a new category Specialised Investment Funds (SIFs) that lets fund managers go both long AND short. Yes, they can profit when stocks fall too. Here’s why this matters (and why I’m cautiously excited): What you need to know: 1️⃣ They’re like mutual funds but smarter (and riskier) SIFs can short up to 25% of their portfolio. That means they can bet on falling stocks something MFs can’t do. 2️⃣ ₹10 lakh minimum investment Not for everyone. But far more accessible than PMS or AIFs that ask for ₹50 lakh or ₹1 crore. 3️⃣ Strategy matters more than branding Each SIF can have its own strategy momentum, arbitrage, sectoral, etc. So don’t just chase names. Understand its strategy. 4️⃣Big upside = big room for loss Shorting isn’t child’s play. If the fund manager gets it wrong, your losses can stack up quickly. This isn’t “set it and forget it” investing. 5️⃣ Still under SEBI’s watch They follow diversification rules, liquidity norms, and can’t go full YOLO. So there’s some regulatory guardrails but you still need to know what you’re buying into. SIFs are a sign of how India’s investing ecosystem is maturing. Anagh Pal did a story for moneycontrol.com on this topic and SahajMoney® shared its view. Would you ever try a fund that bets against the market? ⸻ I make personal finance simple. My goal is to help you understand your money—so you can grow your savings with confidence and peace of mind. 🔄 Repost this to help someone take control of their finances. ➕ Follow me for clear, jargon-free tips on investing, insurance, and taxes. Have a personal finance question you wish someone would answer simply? DM me your question—I’ll answer it clearly and keep your privacy 100% protected. LinkedIn Guide to Creating LinkedIn News India

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*What the bond market is signalling about rate cuts* https://lnkd.in/dub7Mk9t Mumbai: India’s bond market sees further rate cuts as less likely now, at least according to one indicator. The gap between India’s 10-year government bond yield and the repo rate is at 96 basis points, close to its widest in two years. This spread expanded as the benchmark yield rose on concerns about the near-term fiscal implications of reducing goods and services tax (GST) slabs to 5% and 18% and moving several categories of products to lower rates. The monetary policy committee of the Reserve Bank of India (RBI) has cut the repo rate by 100 bps since February to 5.5%. Economists expect further rate cuts, citing tariff shock and its potential impact on the economy, Mint reported earlier. GST relief impact However, the yield on sovereign paper has been rising since Prime Minister Narendra Modi’s 15 August Independence Day announcement of GST relief. The bond market fears a spike in government borrowing to make up for revenue foregone for the indirect tax cuts. After rising from 6.4% on 14 August to 6.6% on 26 August, the yields cooled closer to the meeting of the GST Council, according to data from Investing.com. On 3 September, the council decided to retain two GST slabs — 5% and 18% — while abolishing 12% and 28% rates. On 5 September, the yield softened 3 bps from the day before. On 9 September, the 10-year G-sec yield stood at 6.49. The 10-year government bond yields have not softened after the latest monetary policy, according to Venkatakrishnan Srinivasan, founder and managing partner of financial advisory firm Rockfort Fincap LLP. “The key reason is that the Reserve Bank of India has retained its monetary policy stance as neutral, which led the market to believe that subsequent rate cuts may be delayed in the near term." Pressure on the rupee and tariff-related uncertainties have also made investors more cautious about potential inflation risks, according to Srinivasan. The market may want policymakers to take corrective steps such as reducing the supply of ultra-long bonds, cancelling select auctions, or even conducting open-market purchases, he said, adding that such steps would help ease the pressure and bring the 10-year yields lower. Srinivasan said the recent GST reform initially caused anxiety in the market due to concerns that the government might have to borrow more to cover potential revenue shortfalls. However, it now seems that the actual fiscal impact is smaller than expected, and the government may not need to expand its borrowing programme. Abirami Sekar

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What’s the advantage of Balanced Advantage Funds? From 2020 to late 2024, Indian markets had a dream run. But as valuations rise, even seasoned fund managers are striking a cautious note. Kotak’s Sanjeev Prasad recently said: “Markets are overvalued. Ten years later, they may be higher, but returns in the near term could be more moderate.” ICICI MF’s Sankaran Naren echoed the concern, calling mid- and small-cap valuations “extremely absurd.” When fund managers themselves sound cautious, it’s worth paying attention. Interestingly, both Prasad and Naren pointed to Balanced Advantage Funds (BAFs) as a sensible option right now. So, what exactly are BAFs? ▪️ They are hybrid funds that shift between equity and debt depending on market conditions. ▪️ In bullish times, they increase equity. In rough patches, they cut equity and lean on debt to cushion returns. ▪️ To retain tax efficiency, they usually keep gross equity above 65% but use derivatives to lower net exposure when needed. For investors, this means: ✅ Smoother ride in volatile markets. ✅ Some downside protection during corrections. ✅ Exposure largely to large-cap equities (right now), where froth is lower than mid/small caps. But there are trade-offs too: ▪️ BAFs don’t run as fast in rallies, since part of the portfolio is always in debt. ▪️ Their returns usually sit in the “moderate” range - neither equity-like highs nor debt-like lows. ▪️ No model can time markets perfectly, so expectations must stay realistic. Who might BAFs suit right now? ▪️ Investors with lower risk appetite but who still want equity exposure. ▪️ Newer investors learning to handle market ups and downs. ▪️ Anyone tempted to time equity vs. debt - BAFs let the fund do that job more efficiently. Follow Chakrivardhan Kuppala for more insights. (Disclaimer: This post is for educational purposes only and not financial advice. Always do your own research before investing.) #Investing #MutualFunds #WealthManagement #FinancialPlanning #StockMarket #BalancedAdvantageFunds #HybridFunds

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Can one really be a consumer sector follower/ investor without having read Arindam Paul's book "Zero to Scale"? The practical aspects and depth of insights offered for a digital-first world are a stark contrast to the typical fluff piece book offering India vs Bharat market sizes. This also underscores a more broad tectonic shift in the Indian market. For the longest time, marketing wisdom came from the West inspired management training programs of the top FMCG companies which only hired from the top B schools of the country. It is now fairly obvious that old school brand strategies are unable to find the same relevance or 'top of mind' in a social-first world. Yesterday, a consumer home goods leader LG India IPO'd with a $13b market cap (far exceeding its parent's $9b market cap, no less). The Koreans have ruled this market with leadership across room air conditioners, refrigerators, washing machines and televisions for decades. The Tatas and Godrejs of India have tried and scaled, but have not been able to beat the Koreans so far. The ecosystem is far more enabling today - the ability to be much more agile in marketing, a PLI-supported domestic manufacturing ecosystem and an open-minded Indian consumer. We cheer on, as a new generation of Indian entrepreneurs and companies - Atomberg Technologies, Urban Company's Native, Lumio among others vie for leadership in this tough market. ABN Capital #India #Markets #Consumer #LGIPO

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