The asset management landscape in India is evolving, becoming more segmented and sophisticated. Investors are increasingly building core exposure through index funds and broad-based strategies. Besides this, the role of specialist managers is evolving. There is greater emphasis on differentiated alpha generation. Moreover, they must possess deep domain expertise and the conviction to navigate specific economic sectors.
Manoj Thakur, the founder and Managing Partner at Hornbill Capital, emphasised that the firm’s strategy is based on a distinct set of opportunities. The firm focuses on investing in India’s internet-enabled businesses and the digital technology sector. Hornbill is designed to benefit investors’ exposure to what Thakur describes as the fastest-growing segment of the Indian economy. It is anchored on the belief that these companies are able to deliver strong shareholder value. This is considered over both the medium and long terms through virtuous business models and durable competitive moats.
Globally, technology-enabled organisations have been among the strongest long-term compounds of capital. Thakur believes that in India, the ecosystem is still maturing, although scaling rapidly. This creates an opportunity to invest in high-growth businesses. This is so even in a market often perceived as being expensive.
Thakur went on to add that Hornbill’s differentiation lies in the depth of its understanding of a specific set of business models. This is where effective use of data, network effects and brand strength translates into sustainable competitive advantages. Such a focus has enabled the firm to develop a high level of conviction in both the organisations it supports and the strategy itself.
The key element of Hornbill’s defining edge is access. The organization operates with dedicated public and private equity investment teams. The private equity team deploys capital to growth-stage and private internet organisations operating in India. The public equity team leverages insights from the private equity side. The result includes deeper exposure to business models, operating metrics and cohort-level data. Thakur views these attributes as a meaningful benefit over many public equity managers. They may not have the same level of visibility into how these businesses operate beneath headline quantums.
Multiple market cycles have shaped Hornbill’s investment philosophy. Thakur characterises the firm’s strategy as the application of private equity-style investing to listed companies.
The style is defined by a concentrated portfolio of high-conviction ideas. The approach also includes a long-term holding mindset that focuses on compounding, process-driven due diligence, and ongoing post-investment engagement with management teams. The organization believes that a portfolio of high-quality, high-growth organisations may deliver attractive absolute returns over time. This is while acknowledging that concentration increases risk.
Risk tends to be managed through deep business understanding. This approach also involves the continuous monitoring of the factors driving operating and financial performances, in addition to a disciplined review of the portfolio. An incremental IRR lens, in addition to stock-specific risk assessment, typically guides position sizing and exit decisions. This approach also supports a structured approach to both conviction building and capital allocation.
The set of opportunities has also evolved. Hornbill began investing a little over a decade ago, in 2015. At that time, India’s listed universe included relatively few internet-enabled businesses. Since 2019, which is seven years ago, more digital-first organisations have entered public markets. These developments led the firm to pivot its focus more decisively towards this segment.
Institutional investors, as well as family organisations, are the target audience for Hornbill’s fund. It carries an endowment-style approach and a 3-to-5-year investment horizon. Thakur notes that investors secure their core beta exposure through index funds and large-cap strategies. Manager selection is increasingly framed by the role each strategy plays within a broader portfolio.
Demand for differentiated, relatively uncorrelated strategies drives investor engagement at Hornbill. They are capable of generating alpha through specialisation. The firm tends to invest in both public and private equity markets in India. The investment method is through separate fund vehicles. Investors who recognise the importance of persevering through cycles prioritise consistency.
Client acquisition, particularly amongst HNW and UNHW individuals, tends to be largely relationship-driven. Referrals and existing networks tend to support this task.
