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RIP Parag Parikh- a True-Blue Value Investor

Parag Parikh, veteran investor and one of the most respected figures in the Indian stock market has lost his life in a car accident in the US

Parag Parikh, veteran investor and one of the most respected figures in the Indian stock market has lost his life in a car accident in the US. Ironically, the passionate value investor was in the US attending Berkshire Hathaway's annual general meeting at Omaha, Nebraska where the road accident took his life. Rajiv Thakkar, the Chief Investment Officer of Parag Parikh Financial Services Mutual Fund was reportedly with him during the accident, and has not suffered major injuries.

A highly regarded portfolio manager and value investor, Parag Parikh became a well-respected figure to Indian mutual fund investors after he founded Parag Parikh Financial Advisory Services Mutual Fund in 2013. The fund is operated on a unique investment philosophy based entirely on its founder's strong belief in long-term investing and value investing ideas. A great believer in the behavioural aspects of investing, Parikh argued strongly against the herd mentality and short termism that afflicts not just Indian retail investors but also fund managers. PPFAS Mutual Fund was also the first in the industry to conduct unitholders meetings in major metros, like company AGMs.

Strongly believing that retail investors can create wealth only by picking quality stocks and staying put with them through market cycles, PPFAS Mutual Fund insisted that only investors who were willing to stay on for five years invest in the fund. Parikh forcefully stated that there are no plans to expand the basket of schemes. "Most fund houses keep launching new schemes with new themes - mid-cap funds, closed end funds, infrastructure funds. We see no reason to launch any other scheme because our Long Term Value Fund can do everything - invest in any sector, go overseas, take cash or debt calls, hedge risk", he said in the meeting with unitholders. New schemes in other houses may be designed by the marketing teams, but in PPFAS it was the fund managers who designed the product, he stated. He also criticised the practise of equity funds paying out dividends- "Dividends are unethical. They give you the impression that you are getting something extra from the fund. But you are not. The dividend is just your returns being given back to you".

Parikh rolled out only one fund - the PPFAS Long Term Value Fund- managed in a go-anywhere style. The fund can take cash or debt calls and invest in stocks across the market cap spectrum. It also invests actively in US equities believing strongly in the benefits of overseas diversification.

Parikh believed that Indian investors ought to look actively for value investing opportunities across the globe and argued that stocks such as Nestle and Google in the US markets were available at much more attractive valuations than many Indian stocks.

Parikh was also a strong advocate of mutual fund sponsors and personnel having their own skin in the game. He invested his personal funds in the equity scheme, with all of his staff doing so too. He shuttered his broking business to avoid conflicts of interest with the mutual fund.