ICICI Prudential’s Top PMS Manager Shares Key Insights

With assets under management (AUM) of ₹22,579 crore as of April 2025, ICICI Prudential AMC holds the top position in the Portfolio Management Services (PMS) space. In an exclusive chat with Business Today, Anand Shah, CIO-PMS & AIF Investments, shares his thoughts on market opportunities, investment strategies, and how high-net-worth individuals (HNIs) can build wealth in today’s market.

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India’s Growth Story Remains Strong

Despite global challenges, Shah believes that India’s structural growth is intact. Sectors like financials, consumer services, and infrastructure are expected to drive strong returns in the years ahead.

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What Sets ICICI Prudential PMS Apart?

Shah attributes the success of ICICI Prudential’s PMS to a strong investment philosophy and disciplined process. Their approach, known as BMV – Business, Management, Valuation, focuses on:

• High-quality businesses
• Strong leadership teams
• Fair valuations

A 20+ member research team supports this process by identifying fundamentally strong companies. Shah also highlights their dedicated risk team, which helps manage portfolio risks, especially since PMS strategies can differ significantly from traditional index-based investing.

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Drivers of PMS Industry Growth

The PMS industry is likely to grow due to:

• A rising number of HNIs
• Increased financial awareness
• Demand for differentiated investment strategies

Shah believes that ICICI Prudential PMS is well-positioned to benefit from these trends.

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Strong Returns from PMS Strategies

1. PIPE Strategy

ICICI Prudential’s PIPE Strategy has delivered 37% annualized returns over the past five years. Shah says this success came from focusing on mid- and small-cap companies with strong fundamentals and economic moats.

2. Value Strategy

The Value Strategy achieved a 30% CAGR over five years by identifying undervalued companies with long-term growth potential. The focus is on sustainable earnings, solid capital allocation, and businesses overlooked by the market.

3. Contra & Quanti-FI Strategies

• The Contra Strategy invests in out-of-favor sectors with strong fundamentals, like metals and financials during market downturns.
• The Quanti-FI Strategy uses quantitative models for stock selection, reducing human bias and improving objectivity.

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Outlook on Indian Equities

According to Shah, Indian equities are at a turning point. While global uncertainties remain, India’s domestic growth is supported by:

• Strong consumption
• Growing infrastructure
• Technological progress

However, valuations in some sectors are high. Shah advises a bottom-up investment approach focusing on fundamentally strong companies.

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Advice to HNIs: Focus on Discipline & Diversification

Shah suggests that wealthy investors should:

• Be realistic about returns
• Avoid herd mentality
• Stick to a disciplined investment approach
• Diversify across asset classes and sectors
• Seek help from professional advisors

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Market Cap Preferences: Large vs Mid vs Small

• Large-caps offer better valuation comfort and stability
• Mid and small-caps offer growth potential but come with higher risk
• A balanced portfolio based on risk appetite is the best strategy

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What About the Defence Sector?

Shah notes that geopolitical tensions, like those between India and Pakistan, can lead to higher defence spending, benefiting companies in the sector. While they’ve previously invested in defence stocks, any future exposure will depend on fundamentals and valuations.

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Sectors to Watch: Financials, Consumer Services, Infrastructure

Shah is bullish on the following sectors:

• Financials: Especially banks, driven by economic growth and rising credit demand
• Consumer Services: Supported by rising incomes and evolving consumer habits
• Infrastructure: Boosted by government policies and increasing capital expenditure