3. Nifty Has gone NOWHERE in 5 Years
How to make money in a market like THAT?
4. Special Situation Example Absolute Returns
Merger Arbitrage Siscol- JSW Steel 93%
Capital Structure
Network 18 PCCPS 23%
Arbitrage
Going Private Essar Steel 14%
Transactions Blue Dart 18%
Nagarjuna Fertilizer 187%
Bankruptcy Workouts
JVSL 273%
Asset Sales Smartlink 43%
Holding Companies Nalwa Sons 487%
Spinoffs GE Shipping 79%
Buybacks MICO 175%
SSI 10%
Tender Offers
Alfa laval 17%
5. Sold @ 82
Bought @ 55
Captured 49% Absolute Return in 4 months
Annualized Return: 147%
6. Stock up 49%
Market up: 17%
Significant Outperformance
Returns Un-correlated to Market Volatility
Spinoffs as a theme
We KNEW the break up value is more than market value
There was a PLAN to spinoff the cement business
Break up values were several times current market price
There was a risk from CCI but we KNEW it will take several years to resolve
and market will ignore it and will instead focus on underlying results which
we KNEW would be great
A LOW Risk High Return Trade
Spinoffs as a theme - Focus, Stock as a currency, Access to capital markets,
Stock Options as incentives
Elimination of cross subsidies - elimination of conglomerate discounts.
7. A Pipeline
of Ideas
Transaction IRRs not same as portfolio IRRs. We have a pipeline.
Explosion in transactions
Low competition
Significant Inefficiencies
Despite the zero return in India over 5 years, can you afford to lose on such opportunities?
Can you afford to ignore India?
49. No Deal Yet
Parallel Universes,
Alternate Histories,
Role of Luck
Market Ignored CCI
Consequences of Shorting
Orient paper
Restructuring - Alternate
History
A Value Trap Before?
Process vs. Outcome
