Genesis of Trident Capital

The Homestead Act of 1862 allotted 160 acres of Federal land to those who tilled it for five years and paid a small fee.  Early risk takers from Europe ditched the better-trodden path of being a serf in Latin America to come to the US. The early homesteaders and their subsequent generations have since enjoyed boundless prosperity. The key to their success – ownership of American land with the right incentives.

India is the new America in terms of the opportunity that it presents. Evolution of capital markets means that instead of tilling land we can participate in the success of the entrepreneurs of that land.

Trident Capital Investments does just this – ownership of best businesses in India with the right incentives.

My story and the three wise men of US

My story of founding Trident Capital started in the year 2000, just a few years after 1862 and only some 7,500 miles away in India! There was an air of despondency in the India that I grew up in. The country was marred with corruption scandals that valued who-you-knew more than what-you-knew. Ben Franklin’s autobiography had a profound impact on my impressionable mind, and I left India for the eastern shores of US.

When I was looking to marry the analytical, engineering, nerdy part of my personality with my love for world affairs, history, psychology and finance, I found myself in the temple of value investing – Columbia Business School. I met Warren Buffett in 2012, and he is the reason why I am an investor.

Later, when I was contemplating about the geographical focus of Trident Capital, India was the obvious choice. Because my third icon, Charlie Munger had famously and simply said, “Fish where the fish are”.

Why India?

It was a crisp January morning of 2015. I was in my office in London, scrolling through the news pertaining to the global equities that I was invested in. An obscure news caught my attention. The new Prime Minister of India, Mr. Narendra Modi, and the visiting US President, Barack Obama, were taking questions from the audience on a radio talk show. In response to a question, Mr. Modi talked about how he was inspired by Ben Franklin. Now this was new!

The next five years India implemented one tough reform after the other. A few that stand out in their impact:

• Providing a billion citizens with a unique biometric identity – this is the equivalent of Social Security number of US citizens
• Financial inclusion – almost 500 million bank accounts opened
• Uniform taxation across 28 states – equivalent to the formation of European Single Market of 1993
• Clean up of the banking system – equivalent to the Dodd-Frank Act of 2010 in the US
• Digitization of government auction processes and payment of social benefits – this has put a massive dent on corruption

The result of these reforms has put India on a different orbit of GDP growth – a super-investing cycle. India is the 5^th largest economy in the world expected to grow 7% in the current fiscal year as per latest IMF forecast. Contrast this with recessionary forecasts in the US and the UK.

In Conclusion

After some two decades, my story has converged with India’s story. All my net worth is invested in Trident Capital. It is a sign of my conviction in the prospects of India and an attempt to fix the agency problem of our industry. The strategy is to own (partially) the highest quality Indian businesses for a small fee.

Waiting for the early settlers to come in!

Sachee Trivedi

21^st November, 2024