Glossary
A
Alternative Investment Fund (AIF)
A pooled investment vehicle structured under SEBI regulations, enabling investors to access differentiated strategies across listed and unlisted opportunities.
Alpha
Excess return generated through disciplined research, portfolio construction, and timing of entry and exit decisions.
Active Management
A hands-on investment approach where portfolios are continuously evaluated and adjusted based on evolving risk-reward.
Affiliate
A person or entity that directly or indirectly controls, is controlled by, or is under common control with the person or entity.
Accredited Investor
An investor certified by an accredited agency as meeting the financial eligibility criteria prescribed by Securities and Exchange Board of India, allowing them to invest in certain investment products.
AUM (Assets Under Management)/AUA (Assets Under Advisory)
Total assets managed or advised by the firm.
B
Bottom-Up Investing
A research-driven approach focused on identifying high-quality businesses based on fundamentals, irrespective of macro conditions.
Benchmark
A reference index used to evaluate performance, while not necessarily dictating investment decisions.
Blue-Chip Stocks
Shares of large, established, stable companies.
C
Capital Gains
Growth in portfolio value driven by earnings expansion and valuation re-rating.
Concentrated Portfolio
A high-conviction portfolio with limited stocks, typically 8–25, designed to enhance alpha generation.
Compounding
The ability of capital to grow exponentially through sustained earnings and reinvestment over time.
Category III AIF
Funds employing diverse or complex trading strategies, including listed equity and hedge strategies.
Close-Ended Fund
Fund with a fixed tenure, where investors can subscribe only during the subscription period, and units are generally redeemed upon maturity.
D
Drawdown
The decline from peak portfolio value, used to assess downside risk and resilience.
Diversification
Allocating capital across sectors and businesses to manage portfolio risk without diluting conviction.
Dividend
A portion of profit distributed to shareholders.
Derivatives (Futures/Options)
Contracts based on the value of an underlying asset.
Disclosure Document
PMS Document issued that contains material information about business, services, investment approach, fees, risks, conflicts of interest, and other disclosures prescribed by SEBI.
E
EBITDA Growth
A key measure used to assess the operating performance and scalability of a business.
Earnings Visibility
The predictability of a company’s future earnings trajectory over a multi-year horizon.
ETF (Exchange-Traded Fund)
A basket of securities that trades on an exchange like a stock
F
Fundamental Research
Deep analysis of business models, management quality, financials, and competitive positioning.
Fund Manager
The decision-maker responsible for portfolio construction, risk management, and execution of strategy.
G
GARP (Growth at a Reasonable Price)
An investment philosophy that balances growth potential with valuation discipline to generate long-term returns.
Growth Investing
Investing in businesses with the ability to compound earnings consistently over time.
H
High Conviction Investing
Allocating capital to a select set of ideas where research and insight provide strong confidence.
HNI (High Net-Worth Individual)
An investor segment typically served by PMS and AIF products.
I
Investible Universe
A curated list of companies filtered through governance, growth, and financial parameters before portfolio inclusion.
Investment Horizon
The time frame, typically 3–5 years or longer, is required to realize the full potential of an investment thesis.
IFSCA
International Financial Services Centres Authority (IFSCA) is a unified authority for the development and regulation of financial products, financial services and financial institutions in the International Financial Services Centres.
J
Judgement in Investing
The application of experience and insight to complement data and research in decision-making.
J-Curve
A pattern where investments may underperform initially before delivering long-term gains, often seen in AIF structures.
K
Knowledge Network
Access to industry experts, management teams, and ecosystem insights that strengthen research depth.
Key Drivers
The core variables—growth, valuation, quality—that determine investment outcomes.
L
Liquidity
The ability to enter or exit investments without a significant market impact.
Long-Term Investing
A disciplined approach focused on business fundamentals rather than short-term market movements.
M
Multi-Cap Strategy
Investing across large, mid, and small-cap companies to capture opportunities across market segments.
Market Cycle
Phases of expansion and contraction that influence valuations, sentiment, and capital flows.
Market Capitalization (Market Cap)
Total value of a company’s outstanding shares.
N
NAV (Net Asset Value)
The value of the portfolio per unit after accounting for assets and liabilities.
Niche Opportunities
Emerging or under-researched segments offering potential for superior growth.
O
Outperformance
Delivering returns above benchmark through disciplined execution.
Open-Ended Structure
An investment format that allows periodic entry and exit for investors.
P
Portfolio Management Services (PMS)
A customized investment offering where portfolios are actively managed based on a defined strategy.
Portfolio Construction
The process of building portfolios based on risk-reward, conviction, and diversification.
PIPE (Private Investment in Public Equity)
Investments made in publicly listed companies through private placements.
PPM (Private Placement Memorandum)
Legal document outlining fund terms, risks and strategy of Alternative Investment Fund (AIF).
Q
Quantitative Framework
A data-driven approach using models to evaluate growth, valuation, and risk parameters.
Quality of Earnings
The sustainability and reliability of a company’s earnings.
R
Risk-Reward
The balance between potential returns and associated risks is central to every investment decision.
Rebalancing
Adjusting portfolio weights to maintain optimal allocation.
S
Scalability
The ability of a business to grow without a proportionate increase in costs.
Stock Selection
The process of identifying investment opportunities through research and analysis.
SEBI
Securities and Exchange Board of India, the regulatory authority governing PMS and AIF in India. The regulator of the securities and investment markets in India including PMS and AIF.
T
Top-Down Approach
Evaluating macroeconomic trends to identify sectors or themes of opportunity.
Thematic Investing
Investing in structural trends such as consumption, manufacturing, or digitalisation.
TWRR
Time-Weighted Rate of Return.
Trading Account
Account needed to execute trades.
U
Unlisted Investments
Investments in companies not listed on stock exchanges are often accessed through AIFs.
Upside Potential
The expected growth in value from current levels based on the investment thesis.
V
Valuation Discipline
Ensuring entry prices reflect realistic growth expectations.
Volatility
The speed and frequency of price changes.
W
Wealth Creation
Long-term growth of capital through disciplined investing.
Working Capital Efficiency
A measure of how effectively a company manages its operational capital.
X
XIRR
A method to calculate returns accounting for irregular cash flows, commonly used in PMS/AIF reporting.
Y
Yield
Income generated from an investment relative to its price.
Year-on-Year Growth
Annual growth rate in revenue or earnings.
Z
Zero Bias Framework
A structured, data-driven approach that minimizes emotional or subjective decision-making.