Rashmi Kwatra, Sixteenth Street Capital Founder: ‘We embrace a long term partnership mentality with all of our stakeholders, as we believe this commitment and stability of capital is the foundation for lasting success for all’

Investment partnership refers to any form of business ownership wherein there would be at least 90% of all of its investments that are held in financial instruments like bonds, stocks futures and options and the predominant income that is derived (usually>90%) would go on to have such financial assets as the source. The investment process combines with a firm’s mission, values, and philosophy to define and prioritize a broad set of acceptable behaviors. Pension plans, endowments, foundations, individuals, and sovereign wealth funds develop investment guidelines that specify their investment objectives and constraints. From an investment manager’s perspective, this client policy-setting process is outside the realm of the manager’s investment process. Allowing investment professionals to roam freely within the confines of the investment philosophy, process and values enables their analysis and research to be limited only by their imaginations. This is confirmed by Dov Seidman in his book How. Seidman observes that truly innovative and successful investment teams work on the edge of chaos at all times. Today, the fundamental investment process must extend beyond asset valuation. In fact, future opportunities for the investment community are likely to reside more in superior understanding of market behavior and portfolio construction competence than in fundamental analysis.

Globally there are various investment firms providing diligent services, but Sixteenth Street Capital stands out from the rest. The company is an investment partnership firm with a long-term focus investing in Asia’s fastest growing capital markets. The company manages a concentrated fundamental equity portfolio, with limited capacity, combining value and growth in pursuit of compounded absolute returns. Sixteenth Street Capital conducts deep research to invest only with excellent management teams with a track record of strong capital allocation and corporate governance. The company’s partners are primarily endowments and family offices with long-term commitments to the stability and growth of the fund. Sixteenth Street Capital was founded by Rashmi Kwatra in 2017 and is based in Singapore.

“We manage a concentrated fundamental equity portfolio, with limited capacity, combining value and growth in pursuit of compounded absolute returns.”

Investing In Exceptional Companies

At Sixteenth Street, the investors look for businesses with strong cash flows, excellent management teams and compelling long term prospects. These combine to deliver significant compounding potential for investee company’s earnings or profitability. Investors at Sixteenth Street are often looking for companies with outstanding potential in areas which the traditional financial markets have yet to recognize or appreciate. When investing, Sixteenth Street applies the diligence and mental framework used in private equity, and the knowledge of a successful business operations team, curating fundamental value in pursuit of asymmetric returns. Beyond putting an investment process in place, leadership must foster its ongoing implementation. The CIO and other investment leadership must use the investment process to specify authorities and provide boundaries within which there is unfettered freedom. The investment process provides the most basic set of boundaries defining acceptable activities for investment professionals.

In Asia’s Fastest Growing Markets

Sixteenth Street’s investments are focused on South and Southeast Asia – the region home to what the company believes are the ‘Growth Emerging Markets’ or ‘GEMs’ of Asia. These are markets Sixteenth Street has grown up in, focused on throughout its investment career, and created formidable relationships in. They also happen to be some of the fastest growing countries in the world. They are at an earlier stage of development, with younger demographics propelling the workforce and economic growth. This long runway for growth provide strong tailwinds for quality companies which are established in these markets to compound capital for many years to come. Ultimately, Sixteenth Street strongly believes that people in Asia will eventually all have bank accounts. They will borrow more and spend it on their homes, which will remain the largest purchase one makes in their lifetime. These transactions will increasingly take place through digital platforms. Sixteenth Street investments are mainly focused on these themes.

Powered By People and Partnerships

A leader whose power is manifest via control will find this structure uncomfortable. A less control-oriented leader, however, will leverage the philosophy and process to lead the investment team without micromanaging, providing each investment professional with more freedom than would otherwise be the case. Through experience working in both control-oriented and collaborative freedom-oriented investment environments, the company finds that the control-oriented environment can survive, but only in the short run. The collaborative freedom-oriented environment lays the foundation for long run success—affording experience, opportunities to groom successors, and garnering long-term loyalty and commitment of all employees. Sixteenth Street embraces a long term partnership mentality with all its stakeholders, as they believe that this commitment and stability of capital is the foundation for lasting success for all. Sixteenth Street has the majority of its wealth co-invested in the fund, and then the fund is structured to ensure complete alignment with similarly long-term minded investors. The company views its clients as long term partners, and builds relationships based on transparency, fairness, and mutual respect. For its investee companies, Sixteenth Street supports them through advice and introductions to be as, and only as, helpful as they need. Within its organization, Sixteenth Street has cultivated an ownership mindset across its team and is building a culture which is focused on excellence.

Meet the leader behind the success of Sixteenth Street Capital

Rashmi Kwatra is the founder and CIO of Sixteenth Street Capital. While focused on public markets, Rashmi values investment opportunities as would a long-term private buyer. Prior to starting her own fund, she was the youngest Partner at Prince Street Capital Management, a long-standing Emerging and Frontier market fund. Rashmi was responsible for their investments in South and Southeast Asia. Rashmi holds a dual concentration in Finance and Management from the Wharton School of the University of Pennsylvania, where she graduated magna cum laude. She is a Thai National, is now a Singapore Permanent Resident, and is of South Asian descent. Rashmi is fluent in English, Thai, Hindi, and Punjabi.

"When investing, we apply the diligence and mental framework used in private equity, and the knowledge of a successful business operations team, curating fundamental value in pursuit of asymmetric returns."