Wednesday, February 8, 2023

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Amandeep Singh Uberoi, CIO and Founder of Creencia talks about various investment opportunities

  • Tell us about your journey so far/How have your professional and personal journeys been so far?

Professional Front

During the Pandemic, I had made up my mind to secure all necessary certifications, approvals etc. so as to pursue this in a legal and professional manner, hence, as soon as the 2nd  covid-19 wave subsided, I headed to Mumbai to apply for the requisite registrations, licenses, certificates etc.

After receiving the same in the 3rd quarter of the last Financial Year, I had made it a point to keep the firm bootstrapped and raise and reach the fund management targets for the year in an organic manner, hence, deliberately taking no financial support from my father or family. Fun fact: My father was on the waiting list for the previous quarter !

I think God was kind that he bestowed me with opportunities, so much so that I completed my Fund Management Target for FY 21-22 a quarter early. This has also played a huge part in connecting with like-minded individuals who have a similar goal and vision and most importantly realistic expectations w.r.t to their capital, market conditions etc.

I think this has also been possible by a single-minded vision to not budge on our ideologies whilst negotiating with clients, resisting the temptation in the mind of a 23 year old to reject Cheques with ample number of Zero’s for the simple reason that our ideologies didn’t match has culminated in a pool of clients who apart from being financially savvy are stalwarts in their respective fields. As contractual obligations bound me from revealing specifics, some of our clientele who have invested in a personal capacity include CFO of a Fintech Unicorn, Son of a Cabinet Minister in the Central Government amongst others.

When we completed our 1st year in October 2022, we launched, a new entity, Creencia Ventures to enable start-ups and Private Companies to raise “Smart Money”, i.e. we connect Start-ups with Affluent, informed and experienced Investors who have an expertise in the respective field. This in turn enables the companies to leverage that experience and grow at a faster rate!

  • What inspired you to do what you are doing right now?

Coming from a traditional business family with manufacturing interests in various domains, I had strangely always been inspired by the financial markets at home and abroad. So much so that I used to skim through financial magazines from a young age, devoid of any formal knowledge mind you, in more hope than expectation, that my young mind would able to decipher some of that complex financial jargon. The fact that my family had production units working even when they weren’t present, essentially meaning systems in place to make sure production being carried out even when they are asleep made me question why I couldn’t do that with money itself!

This is why when the time came to select a field for further studies, I was so single minded and determined in my approach that even though my friends and peers were busy applying to any and every college under the sun, I only applied to 4 colleges that were offering specialized financial courses, both nationally and internationally.

And in retrospect, I am indebted to the wise words of my father who advised me to start with studying the Indian markets first and this helped me choose our financial capital over cities such as New York and Boston.

I have always been a very passionate, all-in or all-out kind of person w.r.t to everything I do in life and this is why when I chose something as formalized and professional as Wealth Management, VC Funding and Capital markets, I was grateful to the way my family supported me in this endeavour.

My father was very realistic in his advice and told me as to how even though he was an active investor in the markets and would make sure to diversify his investments using this asset class, he wouldn’t be able to guide me as well as he would have, had I opted for say something more on the lines of our traditional businesses. He pointed out as to how the financial world is a ZERO sum game and I will have to compensate with work ethic and passion for what I lack in experience being a complete outsider in this dog eat dog world.

This also made me realize as to how surprisingly, even in the 21st century, the financial markets were still being considered a gamblers paradise and borderline frowned upon even in the relatively educated strata of our society. Some of my immediate peers and friends would still consider this as a casino and want their money doubled instantly as if there was a genie at work at the NSE office! This is when I realized instead of just investing money for people it would be more important to educate them on the same so as to they should treat this as a business, and explore and dive into its myriad possibilities.

  • Share a brief USP of the firm and what makes you stand out from the competition.

We have formulated our company in such a way that it will be shorter to enlist how we are similar as compared to how we are different!

  1. We have NO FIXED COSTS. Period. No hidden charges whatsoever, Creencia makes money from wealth management, only and only when our clients make money.
  2. We are not limited to equity markets only, we diversify in a range of products and asset classes depending upon the clients risk taking ability, quantum of capital etc.
  3. Early stage Start ups, revenue based financing for established start ups have always been limited to HNIs , VC funds, PE investors etc, however, at Creencia we can partake in these investment models with smaller ticket sizes and get a taste of the VC pie.
  4. As we are in no way a broking house, neither do we intend to become 1, every investor or company cl has a dedicated person assigned to them to keep them abreast of where, when and why their money is being invested, because apart from making them financially secure we want to educate them towards financial literacy.
  5. No two investment strategies are ever the same. Everyone has a different goal and hence as traditional Mutual Funds do, we cannot expect 1 strategy for everyone to achieve their individual goal.
  6. For start ups and companies looking to raise smart capital, Creencia is their best bet cos we have on board clients who are stalwart in their respective fields. This enables start ups to leverage their investors expertise to grow at a faster rate.
  • Market Expectations post-pandemic and future outlook

After a less than appealing previous quarter, it would be safe to say that the worst is behind us in terms of volatility. Economies have opened up and consumption and spends are at a 3 year high. Impact of Geo-political tensions across the world has started to wane. Although there are concerns over an impending recession in the US, at least in equity markets in our country, the blow is expected to be a lot softer here than in other countries.

However, the situation is a bit gloomier for companies looking to raise capital from the private markets, I,e. Vcs and PE investors. Existing investments made at exorbitant valuations are now staring at Down-rounds for further investments and for companies who cannot afford that are cutting expenses with massive lay-offs, reduction in Employee benefits to stay afloat!

We, at Creencia, expect this to be the time wherein the fittest survive. Long gone are the days when every 2nd company is expected to become a Unicorn! Companies with a sustainable business model, Good Promoter background and lean expense book are expected to survive the impending gloomy winters for start-ups looking to raise funds!

  • What kind of opportunities is Creencia introducing which will enable the clients to experience the VC life and invest in startups at different stages of growth, both in India and abroad?

With unprecedented levels of inflation, rising input costs, safe havens like FDs and Mutual Funds are essentially reducing our real income. Hence, Creencia is introducing a new age technique of investments wherein through our exclusive partners our clients can diversify their investments into new age companies and start-ups even before they hit the equity markets.

Through revenue based financing for cash flow positive companies, Creencia enables its clients to invest in a different asset class altogether which helps mitigate their portfolio risks and ride this wave of volatility smoothly. This offers relatively higher returns with monthly or quarterly liquidity as per the investors preference. This enables them to partake in the success story of some of their favourite new age companies whilst having skin in the game and getting regular returns on their investments.

Traditionally, this route of investments was limited to HNIs and ultra HNIs and financially astute people with a limited pocket size couldn’t benefit, hence, we have plugged this gap allowing investors to get higher returns with negligible risk as it is based on revenues generated by the firm and not on their profitability which might be fluctuating for certain companies given the current uncertain conditions.

  • How Creencia creates tailor-made financial strategies for each and every client, taking into account factors like their appetite for risk-taking, their holding period, and their financial goals with respect to the amount invested.

The capital markets are a risky business which is why, first and foremost, at Creencia, we help understand and determine in specific terms what exactly is the monetary amount of risk the client is comfortable with taking. Basically we fix a maximum drawdown in % terms, and make sure the % is such that even if the worst was to happen, the client isn’t losing sleep over it, because never should monetary returns supersede peace of mind and this is a principle which enables us to keep our risk in check and make rational and systematic investments and not emotional ones.

Taking a hypothetical situation where in we have 2 individuals with the same amount of capital but at different stages of their life. A person in his 40s having say 50L to invest would have different investing goals, targets and criterion from a 25 year old having the same 50L to invest. However, the deciding factor amongst the two would be them having completely different mindsets.

Hence, it would be sheer foolishness and a borderline misuse of their capital if we invest both of their corpuses in a similar manner. Reward should be proportional to risk and hence in this hypothetical situation suppose the 25 year old is less averse to risk, at Grow his investments would be diversified and structured in a way wherein he would have higher overnight exposure, lesser capital allocation in non-risky assets such as bonds or debt funds and his strategies would be formulated in such a way that he would profit more as compared to the 50 year old whilst adhering to his max drawdown %.

However, that doesn’t mean the 50 year old investor would just be a passive investor as in case of Mutual funds or FDs, he too would have a positive expectancy system, i.e. his R:R would still be greater than 1:1, and he would be able to profit off market cycles whilst maintaining a higher security of capital as compared to the other investor, which would be in sync with his lesser aggressive mindset in terms of investments and financial goals.

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