AIF || Ambit

Objective & Strategy

Ambit Pricing Prowess Fund is designed for niche, long-term investors seeking superior absolute returns by investing in high-quality businesses with sustainable compounding through strong pricing power.

The strategy targets Growth companies with lasting Quality and ‘Forever’ attributes, leveraging a proprietary Pricing Power Framework to identify businesses with robust margins, and steady earnings growth.

Opportunity

Inflation Hedge:

Pricing Power companies can raise prices to offset inflation, there by preserving their real earnings and shielding investors from the eroding effects of rising costs.

Drives Higher Margins:

Unique Value Propositions and Strong Brand Recognition allowing them to command premium prices, withstand competitive pressures.

Stable, Quality Compounders:

They tend to be less glamorous and newsworthy (exceptions when at early life cycle), instead are quiet and Stable Quality 'compounders'.

Lower Volatility:

Strategy works across multiple global markets and economic cycles, making pricing power a cornerstone of resilient, high-quality portfolios.

Value Creation:

The ability to have pricing power can support premium valuations, as investors are willing to pay a higher multiple for companies with predictable and sustainable growth.

How is Ambit Pricing Prowess Fund different?

Approach

We do not view investing as a treasure hunt. The fundamental principles of investing are well known.

Mankind has made progress by ignoring complexities and focusing on simple questions. Fundamental principles of investing are well known like the DNA is the common code of life, 7 primary colors are the base of all colors, All music based on 12 tones and 2 rhythms.

Instead of re-inventing the wheel, our approach is to leverage on the power of simple and obvious opportunities.

Our investment approach is not that of "placer mining," the process of sifting through piles of sand for specks of gold. Instead, we attempt to apply our pricing power framework to find the large, unrecognized nuggets of gold that sometimes lie in plain sight on the ground.

LOLLAPALOOZA Effect

Dominant Franchises

Advantage in Key Consumer Variable with High Variance

Multiple, Increasing Moats

Management Playing the Long game

Quality First - Forward Looking Quality

Scale, Increasing Market share, Margin Stability

Pricing Prowess

The Lollapalooza Effect in business is about getting multiple, mutually reinforcing factors right. It's about understanding the big ideas, creating the right culture, aligning incentives, and continuously adapting while focusing on the fundamentals. By doing so, you set the stage for extraordinary success, where the whole becomes much greater than the sum of its parts. That's the magic of the Lollapalooza Effect.

- Charles Munger

Investment Framework

QUANTITATIVE FRAMEWORK (30%)

Quality: Margin Volatility; OCF Conversion; ROE consistency; FCF Efficiency; Audit Trial; Management Type; Quality of Capex

Growth: Earnings Predictability; Consistency in Revenue/Earnings Growth; Future Growth Expectation

Sustainability: Life Cycle; Lindy Effect

Valuation: Absolute (Intrinsic P/E); Relative Historical; PEG

QUALITATIVE FRAMEWORK (70%)

Is it a leader or dominant player?

Is scale dynamics favorable?

Is ownership structure enabling?

Understanding price elasticity

Does the form have winning strategy?

Is the Moat expanding?

Is value creation possible?

Variance Analysis does the company

have advantage?

Premiumization at Play

"Does the company have Pricing Power?"

Fund Positioning

FOCUS ON FORWARD QUALITY

While static quality is indexed to the past, we seek companies that will be successful over the next five to ten years.

We ge beyond Conventional Wisdom and apply the proprietary Pricing Power framework

Our investment focus is on companies in the Sweet Investment Zone, which lies between late-stage two and late-stage three buckets. Sweet Investment Zone is where companies generally, witness J-curve growth and the bulk of the valuation re-rating occurs, presenting a high probability of finding multi-baggers.

Risk Positioning

Fear, pessimism, prudence, uncertainty. skepticism, caution, risk aversion and reticence

Greed, optimism, exuberance, over confidence, credulity, daring, risk tolerance and aggressiveness