Ashish Somaiya, Chief Executive Officer (CEO), Whiteoak Capital AMCReal estate, with 50% of its investment portfolio in this asset class, has a lot to do with it. However, this was not always the case. “This exposure was made from mid-2020 to mid-2021 and was a counter-cyclical decision. Over the past 10 years, real estate has performed very poorly, but it has been witnessing a huge churn, consolidation and under-Investment And that is set to change,” Somaiya said during an interaction with Mint as part of our annual series Guru Portfolio.
The series was launched in 2020 to measure the impact of the COVID-19 pandemic on the personal investments of leaders in the financial industry. This year, industry leaders tell us how their investment portfolios have performed over the past two years, what has changed in their investment strategy and what lessons they have for investors.
Somaiya’s real estate holding is a mix of physical residential and commercial properties. “I don’t see how I can be bullish on the economic prospects from here on out without being bullish on real estate.”
no gold and no debt
Before including real estate in his portfolio in 2020, Somaiya was a 100% equity investor. He has never invested in debt other than keeping cash in a bank account for emergencies and does not see gold as an investment option.
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“I don’t think gold serves any investment purpose other than to reduce the downside or volatility amplitude when the economic and equity market conditions are very bad. If I can live with the decline in the value of my portfolio and I’m okay without the downside cushion to make sure I don’t miss out on the upside participation of equities on recovery, then I don’t see that as an investment. Why should gold be kept,” he said.
However, Somaiya said that investors who are disciplined, methodical and risk averse should ignore his investment strategy because, unlike many, he can face extreme conditions in the markets and his portfolio. He said he reviews his asset allocation once a year or more, which is mostly not intentional or pre-planned. Somaiya said, ‘I cannot call myself disciplined.
high risk investor
Equities constitute 50% of Somaiya’s portfolio, half of which is in small and mid-caps. Asked whether he prefers direct investment or fund managers, he said he would do both if not for the sake of rules.
“Due to regulations as well as company policies, I only invest in equities listed with WhiteOak and with external managers in the case of private equity.”
They do not yet have international equity exposure, but have plans to invest in global emerging markets (GeM), which WhiteOak will launch later this year.
Additionally, Somaiya is always on the lookout for opportunistic investments and maintains a home equity account for the time required to fund such opportunities.
As part of real estate investing, Somaiya also worked in REITs, or real estate investment trusts, briefly with a medium-term investment horizon and felt it was a better investment strategy over debt.
“Between the end of 2020 and 2021, REITs delivered more than 10%, which included yield and appreciation. I have withdrawn the money and redirected it to equity.”
family finance
Somaiya understands well the importance of his spouse’s involvement in family finances and, therefore, has made his spouse a signatory to all his investments. “Everything owned by my family is entirely owned by my spouse or my family trust and no decisions are made without my spouse’s involvement. I have nothing personally is,” he said.
Explaining the reason behind this, he said, “If something untoward happens to me, I don’t want him to call my chartered accountants, advisors, banks, insurance agents, mutual funds or brokers. I can guarantee that he will.” Will be under control and my entire family will be financially secure in such a situation.”