Not many were surprised when White Oak Capital attracted some of the largest foreign portfolio investment inflows into India in the past few years. Another notable feat was when the investment management and advisory firm confirmed their entities collectively have Assets Under Management (AUM) of USD ~ 5.6 billion (as of April 30, 2022). These achievements, while praiseworthy, are not exactly unforeseen because anyone who is familiar with Prashant Khemka knows all about the industry veteran’s unparalleled understanding of the equity market.
Speaking at The Success Edition, an initiative by Kotak Mahindra Bank and YS, Prashant Khemka, Founder and Managing Director, White Oak Capital, finally revealed the secret behind his success – genuine love and a deep passion for equity that began many, many years ago.
An early love for equity
Growing up in a middle-class Marwari house in the mid-eighties, Prashant would see his affluent neighbours enjoy experiences and affluence that he could not afford. That disparity gave rise to the aspiration to make more money. His parents further fuelled the desire by advising him to start a business or a factory, because that is what most of their friends and relatives were doing at the time. The dream began to take shape in 1985 after Rajiv Gandhi became the Prime Minister of India.
“The market shot up a hundred percent in one year, which still remains the best year for Sensex. Around that time, I lost my great-grandmother, so the extended family, as was the ritual, gathered at home for 12 days and talked about nothing but the equity markets and how they were minting a lot of money. That exchange really grabbed my attention,” he remembered. Prashant began to feel that the market was an honest, legal, and ethical way of making money, and that’s what drew him in as a retail investor. “Initially, I would look after the family portfolio and advise them, but then in due course, I had my own money invested in the market as well, and that was the starting point. Since then, I have always remained fascinated and fully invested in the Indian equities market despite having spent a lot of time outside India for work,” he added.
Taking the entrepreneurial plunge
His career spanning over two decades has seen him make a name for himself as the renowned fund manager at Goldman Sachs, with a keen eye on Indian and emerging equities markets. But after a glorious corporate career, he branched out with his own venture in 2017. “In hindsight, it’s very surprising that it took so long. I spent 19 years in the corporate world. In college, if I had spoken about this, none of my friends would have believed that I would be in the corporate world for that long. I would not have believed so myself, but things were going very well at the firms that I was working in before. My responsibilities were growing by the day and in a way, I was running a boutique within a large firm. That kept me from starting my own journey with White Oak. Looking back, it should have been at least a decade sooner,” he said.
With White Oak, Prashant’s aim has been to build a highly successful investment management organisation. “We believe that the success of an investment organisation is strongly tied to the performance that the firm can deliver to its clients, so the idea is to deliver the highest performance to our clients in any product or strategy that we offer. If we do so, our clients are going to recognise the performance and they are going to trust us with their capital and that trust would be the byproducts of our success. So we are in the process of building a very performance-centric or performance-first culture-based organisation,” he added.
Finding hope in times of despair
The biggest challenge was taking the initial leap of faith. Prashant reminisced how his friends had cautioned him about the cessation of a fixed paycheck that he received for 19 years. Another challenge was to don multiple hats besides investing, such as operations, compliance, legal, and regulatory finance. “All these different departments had to be built on day one. So before my team members in these functions came on board, I had a three-month period where I was juggling several hats and applying myself to areas where I had little to no clue,” he explained.
Getting the early group of investors is extremely crucial, according to Prashant, as they serve as an endorsement to the future group of clients. Hiring the right team was also another challenge, which he claimed he was able to execute in a very fine manner. “The biggest accomplishment has been bringing on board top-notch people, not just in terms of calibre but also in terms of alignment to the firm’s values and to the vision of building a performance-first culture in the organisation,” he added.
Besides these hurdles, Prashant also found support along the way. Uday Kotak, Managing Director, Kotak Mahindra Bank was one of the first people Prashant met when he introduced him to some of Kotak’s senior team managers. “He assured me that at Kotak Mahindra Bank, we’ll be able to find a very strong partnership. It was something that I already knew but it was good to have him emphasise that and provide crucial advice. He was and still is an inspiration to many entrepreneurs including myself,” Prashant noted. Today, Kotak Mahindra Bank is one of White Oak’s most trusted partners across various aspects, be it custodial services, regular banking services, commercial banking services, equity broking services or as a client.
Investment is a sport
A cricket buff, Prashant believes that investment is a sport where the game revolves around generating wealth for clients. “In investing, your performance can be tracked to the decimal point and is recorded to the decimal point for anyone to take a look and compare with others. It’s very similar to cricket in many ways. For example, if Tendulkar scored 100 centuries, you can look up where each of those centuries was scored and against which countries. You can also compare that with other players of the era. I think investing is unique in allowing that kind of scorekeeping,” he explained.
Another similarity between investment and sports is passion. Prashant thinks investing has people as passionate about it, as cricketers are passionate about their sport. “You can’t become a cricketer by thinking that you’ll get so many endorsement deals. It’s the love for the game which gets you there and then the endorsements are a by-product. Similarly in investing, you cannot become a good investor if you think becoming a CIO or a fund manager is going to be accompanied by big paychecks. If you’re passionate about investing, you will achieve success,” he advised.
