Enceladus Capital is a Singapore based investment management firm whose investment philosophy is inspired by the original 1950’s Buffett partnerships. The managing partner and principal of Enceladus Capital is Mayurkumar Gadewar, who is an ardent disciple of Warren Buffett & Charlie Munger and closely follows their principles on investing and life.
Partnership Structure and Ground Rules:
- Partnership Structure and Ground Rules have been copied exactly from Warren Buffett’s initial investment partnerships.
- Every single rule has been very intensely thought through by Warren Buffett and Charlie Munger. Why not just clone it?
- Fair fee structure with a hurdle rate, long-term horizon, 5-year test against S&P 500 for judging performance and skin in the game.
- Gives us a huge competitive advantage and attracts the right type of investors/partners.
Enceladus looks to partner with like-minded clients who are interested in a patient, long-term investment approach that is rooted in the principles of value investing. Our client base consists mainly of high net-worth individuals, university endowments, foundations, family offices, and pension plans.
We manage separate accounts for clients held at a highly reputable and very low-cost brokerage firm. By using separate accounts, clients get complete transparency over the investment process as well as complete control over the access to their funds (the funds are held in the client’s name in their own separate account). Opening an account is simple and can be completed in a few minutes.
- Mayurkumar Gadewar has significant % of his personal net worth invested alongside clients. All investment decisions are made solely by Mayurkumar Gadewar.
- The fee structure is completely aligned with clients interests and is fair in both directions.
Fee Structure (Fair on Both Sides)
Sales Load: 0%, Management Fee: 0% per annum
Performance Fee: 25% paid annually over an annual hurdle rate of 6% subject to “high water mark”. Click here for a working example.
- Copied from initial investment partnership of Warren Buffett.
- It truly embodies the principle of making money with you, not off you. Unless you do well, we earn nothing.
- Very few funds follow this fee structure (you can count them on fingers). Most of these funds are highly successful (around 26% pa returns net of fees), require high minimum initial investment & are generally closed for new investors.
Best Investment Advice
Buffett’s investment advice has revolved around six key ideas for all investors:
"Think of stocks (1) as fractional claims on entire businesses, (2) that swing somewhat erratically in the short term but (3) behave more in line with their gains in intrinsic business value over the longer term, which, when (4) viewed through the lens of a long-term compounding program (5) tend to produce pretty good results, which, with (6) an index product, can be captured efficiently in a low-cost, easy-to-implement way."
Buffett’s advice to his trustee once he is gone:
“My advice to the trustee couldn't be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard's.) I believe the trust's long-term results from this policy will be superior to those attained by most investors — whether pension funds, institutions or individuals — who employ high-fee managers."
Most investors would do well investing in a low-cost well diversified index fund. If you decide to ignore this advice, make sure you look for very high standards from your fund manager.
What Type of Investor Would We Like to Partner With?
- High net worth individuals / companies / foundations investing a relatively small sum of their overall portfolio.
- Have staying power, and will not panic in and out of the investment. Limit the churn rate and will not sell/liquidate at the wrong time. We would like to attract the right kind of investors with a long-term time horizon. We want investors who are in sync with our objectives, our measures and our time horizon.
- The investment world is all about shouting louder than the next guy so you could get attention. But we want to reach out to people who aren’t impressed by noise.
- We selectively hold discussions with referrals of current partners and require at least two reference checks.
- We do not have a sales team and we do not promote our firm through brokers or advisors. In fact, I have a personal "no-fault rule" that I do not invest in anything which is being promoted to me. We expect potential investors to read through this (a rather long) website and understand our approach and philosophy. If you feel comfortable and wish to partner with us, you can register your interest. I would be happy to answer any questions and also meet up in person, or communicate over the phone as it might be feasible.
- When we meet, do not expect a polished sales pitch (I am not good at that). But do expect a clarity in thinking, absolute passion in investing, total integrity and good investment returns above S&P 500.