Published on 27, Jan 2023

Dumont Global’s New Partner Shaunak Misra Shares His Investment Philosophy

New York based generalist investment fund, Dumont Global has welcomed its new partner and senior analyst, Shaunak Misra. Launched in 2018, Dumont Global focuses on orphaned assets, which is Misra’s current focus with the company. Some examples of orphaned assets include niche industries, esoteric geographies, and unclassifiable securities, which are often small, mid, micro cap companies.

Misra was formerly a senior analyst at SoftBank Asia Investment Fund (SAIF Partners), where he led public and private investments across consumer, financials, and technology, Misra holds an MBA from Columbia University and is a Chartered Financial Analyst® (CFA®) charter holder. His vast experience and successes in the investment industry have led him to develop his own investment philosophy, which he is willing to share.

Misra describes this philosophy as looking for businesses trading at or less than half of their real business value, run by owner-operator management teams with long-term accretive capital allocation. "The essence of the strategy is to find misperceived quality in areas of the market that are overlooked” he says. He focuses on trying to find dislocations, understanding why those exist and reasons for those to close out in favor of his view. 

He says that he looks for four key aspects, all of which contribute to his interest in investing in a particular business.

• Business Quality – Misra looks for high quality businesses that earn high returns on incremental capital invested that can be sustained for a period of time.
  • What does the company do and how does it make money? How sustainable is the current business model?
  • What are the competitive advantages of this business and why do they exist?
    • Entry barriers
    • Customer switching costs
    • Intangible assets (brands, patents)
    • Network effects
    • Cost advantages (cheaper processes, better locations, unique assets, greater scale)
       
• Management Quality – Who is leading this business and what do we know about them?
  • How is management aligned with shareholders? What are their incentives?
  • How has management allocated capital historically?
  • What has been the track record of management decisions – have they displayed independent thinking?
     
• Scalability and Growth – What is the total opportunity? How is it split currently? Why will the company be able to grow going forward? What is its right to win? How will economics change once the company scales?
   
• Valuation – What are the right valuation metrics? What’s currently built into the stock price? How and why do you think differently? Why is your method of valuing the company logical? What is your investment time horizon?

Misra thinks that having a checklist approach that attacks these questions (and more), helps minimize errors in the investment process.

Website: https://dumontglobal.com/

Contact: sm@dumontglobal.com