Where the rich are investing 2016

Krishnakumar Natarajan

The executive chairman of Mindtree has been accumulating the HDFC Bank stock since its listing

RA Chandroo

Krishnakumar Natarajan has been investing for more than three decades. “More than the return, it was the high from spotting winners early that kept me going,” says the 58-year-old, who has invested 70% of his wealth in equities. Three wealth managers handle 80% of his equity allocation and the balance is managed directly by him. 

Natarajan, whose 4.77% stake in Mindtree is valued at over Rs.400 crore and who also draws an annual remuneration of over Rs.6 crore, is meticulous about his monthly reviews with his wealth managers and the homework he does before he invests on his own. 

“If a particular sector stokes my interest, I first speak to people from that sector to find out more about the key macro drivers and then drill down to find out investment worthy companies,” says the seasoned investor. Natarajan bets on the ones with a good management team at the helm because according to him, they tend to manage both the highs and downturns in an economic cycle better than the rest. He also looks for companies who post their growth phase have the ability to generate sustainable cash flows and healthy return ratios. While HDFC Bank is a stock that he has been accumulating since its listing, now he has set his sights on the logistics sector which is expected to get a fillip post-implementation of GST.

After 17 years of hands-on involvement in building Mindtree into an IT specialist, Natarajan as the executive chairman is now focusing on leadership development and corporate governance. He wants to spend the extra time on his hands investing in social ventures that walk the fine line between running a profitable business and creating a sustainable impact. Social Venture Partners and Unitus Seed Fund are the two vehicles where he has invested. 

While the average IRR of his portfolio is around 15-17%, Natarajan expects investments in the social sector to generate an IRR of 8-10% and also create a significant social impact. In the years to come, he expects the allocation of alternative investments (angel and impact investing) to increase to 15-20% as he goes about helping spirited entrepreneurs realise their dreams.

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