Investment Philosophy
The Arthaśāstra, an ancient Indian Sanskrit treatise on statecraft, economic policy and military strategy, which served as a source of good governance and guidelines for kings and rulers, says that the quality of a person, character and knowledge are prime requirements for wealth creation. Etonhurst’s Investment Philosophy is based on these three fundamental doctrines of wealth creation.
At Etonhurst we believe “People” are the core part of our business. We build supportive environments to nurture ideas, strategies and open exchange of thoughts. Our people are encouraged to ask questions and be inquisitive.
Constant information flow between Etonhurst, its people and its stakeholders is a necessity and not a requirement for growth. We believe in building trust through transparency in everything we do.
Unquestionable, 100% integrity is the most valuable asset of the company that we swear by at Etonhurst. There is “zero” tolerance for any unethical business practices and violation of ethics code. Our focused and disciplined approach to investment is centered around identifying the risks before it can potentially disrupt any gains. Our goal is not to necessarily seek highest return-based investments, but to seek the highest risk adjusted returns based investment.
Etonhurst is a data-driven company; combined with qualitative insights and on ground experience we constantly endeavor to seek market inefficiencies to generate superior risk adjusted returns. We believe in giving more value to all our stake holders than receiving gains for ourselves. We value long lasting relations with investors, partners and people over any short-term outcomes. That is our competitive edge.
A higher level of risk and uncertainty is usually rewarded with higher interest and profit. Such has been the basic tenet of investment and driving force for entrepreneurship. However, the most essential tool or arsenal to combat risk is knowledge. At Etonhurst, we constantly seek knowledge through research and interactions with market participants to equip ourselves to qualitatively and quantitatively assess risks and find paths to mitigate them. When determining the returns of the underlying investment opportunity, Etonhurst evaluates both the risk involved and the productivity of the capital / asset / business. Emphasis is given more on consistency of returns than on volatility and unpredictability of returns. We believe in long-term delivery of returns over binary outcomes.
A similar analogy with cricket: we bet on players with high batting averages built over years of run scoring rather than on pinch hitters with binary outcomes. We believe there are market inefficiencies all around us; especially in emerging markets. Etonhurst's aim is to identify such inefficiencies by leveraging its knowledge to generate superior risk adjusted returns. We do not believe in timing markets as outcomes can vary deeply based on elements which may not be necessarily under our control. We believe in our ability to source niche and off market opportunities that can generate higher returns with risks that can be effectively managed.
