Deepak Shenoy: Journey from a technology enthusiast to a financial expert

Deepak Shenoy's Educational Background and Childhood

Deepak Shenoy, founder and CEO of Capitalmind, comes from a background that blends both tech and finance. Although specific details about his early schooling are limited, it is clear that his passion for numbers and technology laid the foundation for his future in finance. Shenoy’s journey into the world of finance began when he started taking an interest in the stock market and investment strategies early on. His education equipped him with a solid understanding of the technical and analytical skills needed to navigate the complex world of investment management. 

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Deepak's first experience with investing occurred in 1999 when he dived into the stock market, purchasing a tech mutual fund just before the dot-com bust. This early mistake became one of his most valuable lessons, teaching him the importance of resilience and learning from failures in the financial world. Over the years, Shenoy built upon his education and early lessons to found Capitalmind, a platform known for its quantitative and algorithmic approach to investments. 

The Capitalmind Journey

Capitalmind started as a humble blog, the “Indian Investor’s Blog”, where Shenoy shared his insights on the Indian markets. Over time, this passion project evolved into a full-fledged portfolio management service (PMS) company in 2009. Today, Capitalmind manages over ₹2,200 crore in assets, serving around 1,300 clients. The company's focus on using quantitative strategies for portfolio management has helped it stand out in an increasingly competitive market.

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Shenoy believes that quant investing—which relies on statistical models to identify investment opportunities—offers a more objective and efficient way to manage portfolios. The company’s Adaptive Momentum, Resilient, and Surge India strategies have become popular among investors. The Adaptive Momentum strategy, with an AUM of ₹985 crore, focuses on identifying stocks with strong price momentum, while Resilient targets companies with steady profits and low price volatility. Shenoy is confident that these strategies, developed over years of learning from mistakes, will help Capitalmind grow further.

Betting on Quant for Mutual Funds

Capitalmind’s next big move is entering the mutual fund space. Shenoy is waiting for the final regulatory approvals for the mutual fund license and plans to introduce strategies similar to its PMS offerings. He believes that applying the same quant-based strategies to mutual funds will attract a broader audience, as the lower investment threshold will make the funds accessible to more people.

Quant investing in India is on the rise, with the AUM of quant mutual funds growing from ₹300 crore in 2020 to over ₹9,000 crore by August 2024. Shenoy's conviction in quant strategies stems from their independence from human biases, such as fund managers leaving and negatively impacting performance. He argues that reducing the number of human-made decisions leads to more consistent results and lower fees for investors​.

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Learning from Mistakes and Staying Humble

Shenoy is candid about the mistakes he made early in his career, particularly during the 2018 market bust, when his portfolio was overexposed to micro-cap stocks. It took several years for those portfolios to recover. However, these experiences helped him refine Capitalmind’s strategies and manage crises better, such as the Covid-19 market crash in 2020. During the pandemic, his Adaptive Momentum strategy shifted to cash before the market’s downturn, minimizing losses for investors​

Shenoy emphasizes the importance of humility in investing, admitting that early success often leads to overconfidence. He recalls Warren Buffett's famous quote, “Beware of geeks bearing formulas,” and adds that despite the warning, quant-driven approaches have outperformed traditional investing strategies in recent years. For Shenoy, the key to success is understanding that the market is always bigger and smarter than any individual​.

Deepak Shenoy's: "Money Wise"

In 2021, Deepak Shenoy released his first book, "Money Wise: Timeless Lessons on Building Wealth," a guide aimed at simplifying the process of building wealth through disciplined investing. Drawing from his years of experience as an investor and entrepreneur, Shenoy breaks down complex financial concepts, offering practical advice on making, saving, and investing money. The book emphasizes the importance of consistency and the dangers of chasing short-term gains. Shenoy uses relatable stories and examples, making it accessible even to those new to investing.

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