Several PMS funds have given a post fee return CAGR >40% for past 4-5 years which easily beats the returns of best of the mutual funds.
Good fund managers typically are very shy and avoid limelight. Unlike people like Rakesh Jhunjhunwala who would prefer limelight because once he has taken a position, he would want others to follow; PMS funds keep on adding clients and it becomes difficult to generate good returns for their new clients if portfolio stocks start running too soon.
SEBI has been clamping down on PMS funds in the last few years with increasing compliances. SEBI has increased the minimum corpus from 10L to 25L. Managers believe that it may soon reach 1Cr and thus many have already introduced 1Cr as the minimum.
There are several good PMS funds out there. Some advice for prospective investors:
- Avoid PMS funds run by banks, NBFCs or brokers. Go for entities which only do PMS.
- Evaluate returns CAGR along with duration and consistency
- Timing is crucial. Not every fund manager has a patience to build a portfolio over 3-4 months for a new investor.
- Instead of going through a wealth manager, approach the PMS funds directly and negotiate on fees. 1%/10% is not unheard off.
I have heard good things about Basant Maheshwari, Nine Rivers, Quest, Vallum Capital (Alphabetical order; All have 45%+ returns for last 4-5 years post fees). Obviously, there are good PMS funds other than these but people in my network had not invested through them.
PS: I met a few PMS fund managers/owners as I intend to start a PMS fund myself (And thus my views may be biased)