Dear Partners,
We are pleased to provide updated Veda Global LP returns. Veda Global LP is a long only, fundamental research fund focused on Indian equities.
Veda Global was established in 2021 and has outperformed its benchmark since inception. The strategy initially focused on buying India-listed credit rating agencies. We have since bought positions in other financial monopolies. The goal is to buy businesses that have high ROE, high margins and growth.
We also opportunistically buy special situations or deep value stocks. One example was our purchase of NSE stock at 660 INR per share (12× PE) for a duopoly stock exchange business with 90%+ market share and 80%+ margins. The stock of NSE has since traded up to 2,000 INR per share — a 3×+ return in under 2 years.
The current portfolio consists of NSE, CRISIL, ICRA, CARE Ratings and a few other smaller positions.
We are evaluating a new special situation stock in India with a 2026 catalyst. More details to come, but we will also set up a side pocket for this investment if interest arises. This situation reminds us of the NSE special situation which was a 3×+ return in less than 2 years. We welcome inbound interest from current or new LPs for this side pocket or the fund. Our current return projection is 2–3× in 1 year and 5–7× over 3–5 years on this stock.
In the Berkshire Hathaway 2007 letter, Warren Buffett writes about The Great, The Good and the Gruesome. Below is a summary of Buffett’s philosophy on business quality — which also mirrors the approach of both Veda Global LP and Columbia Heights Partners, LP.
In Veda Global, we own NSE, CRISIL Ratings, CARE Ratings and ICRA Ratings. I believe they all fall in the category of Great Businesses based on their ROE, oligopoly position in the market, growth prospects and valuations when we entered the names.
India macro remains robust with the country contributing meaningfully to global GDP growth. India will soon be a top-3 global GDP. I believe that global institutional investors are underallocated to India compared to their allocations to Japan, Germany and the UK.
Thank you for your support and we welcome new LPs to the strategy.
“A truly great business must have an enduring ‘moat’ that protects excellent returns on invested capital. The dynamics of capitalism guarantee that competitors will repeatedly assault any business ‘castle’ that is earning high returns. Therefore a formidable barrier such as a company’s being the low-cost producer or possessing a powerful world-wide brand is essential for sustained success.”
“Long-term competitive advantage in a stable industry is what we seek in a business. If that comes with rapid organic growth, great. But even without organic growth, such a business is rewarding. We will simply take the lush earnings of the business and use them to buy similar businesses elsewhere.”
“To sum up, think of three types of ‘savings accounts.’ The great one pays an extraordinarily high interest rate that will rise as the years pass. The good one pays an attractive rate of interest that will be earned also on deposits that are added. Finally, the gruesome account both pays an inadequate interest rate and requires you to keep adding money at those disappointing returns.”
Kind Regards,
Gorav Khanna
Managing Partner
Veda Global LP / Columbia Heights Partners LP
Disclaimer: Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that future performance of any specific investment made reference to in this letter will be profitable. This letter does not serve as personalized investment advice.