Tapping into India’s growth engine, Monsoon Pabrai launches NSE investment vehicle

At just 25, Monsoon Pabrai launched her own investment fund — a rare feat in an industry still dominated by older men — drawing inspiration from Warren Buffett, Charlie Munger, and hands-on experience in public equities across the U.S., India, and Asia.

She named her firm Drew Investment Management after Nancy Drew, the fearless teenage detective she grew up reading. “I read all the books when I was around nine years old. I think investing is a lot like investigative journalism,” she says. “It’s like being a detective” — asking the right questions, following threads, and never being satisfied with surface-level answers.

Last month, Pabrai launched a Special Purpose Vehicle (SPV) to give 100 accredited global investors rare access to India’s National Stock Exchange (NSE) — a dominant player in one of the world’s fastest-growing markets.

A thoughtful and disciplined investor, the UC Berkeley alumna brings a clean, Buffett-inspired approach to long-term investing. Her strategy is simple: “no leverage, no shorting, no gimmicks.”

In this wide-ranging conversation with Kesav Dama, the New York-based Pabrai discusses her latest venture, reflects on growing up in the shadow of her father — legendary investor Mohnish Pabrai — and shares her early exposure to the world of finance (her childhood Monopoly board was a custom Berkshire Hathaway edition). She also opens up about her investing philosophy, why she prefers public markets over startups, and the unique challenges — and privileges — of being a young woman running her own fund. And yes, she was in the room when Warren Buffett announced his retirement — and recounts what that moment was like.

Let’s start with a timely question. You were at the investment meeting where Warren Buffett announced his retirement. What was your immediate reaction?

Every year, the meeting is usually around six hours — it starts at 8 or 9 a.m. and goes until 3 or 4 p.m. This year, the schedule was set to end at 1 p.m. We didn’t know what was coming; we just knew it was shorter than usual. I figured maybe it was because of his age — that he just couldn’t do the long hours anymore.

But when he began talking about what a privilege it’s been to do what he loves, I think everyone in the room realized what was happening. It was chilling. A little bit expected, and a little bit unbelievable at the same time.

But I think it’s amazing that we’ve had him in our lifetime — that we’ve been able to watch him navigate events we normally only read about in the news. It felt very special. The crowd really loved him.

Your investment philosophy mirrors that of Warren Buffett — you focus on undervalued stocks and long-term value investing. How big of an influence has he been on you? I also noticed many books on your reading list are about him. What is it about his work that resonates with you?

Sure. I think it’s because his thesis for every investment is always so simple and easy to understand. It’s really easy — especially if you’re an analyst at a fund — to get stuck in Excel, chasing tiny gains over short periods and selling quickly. That kind of investing might earn you a good salary, but it’s not the kind of independence I was looking for.

What I love about Buffett’s approach is that it’s not overly complex. It’s really about the story — understanding the business and backing it for the long haul. And if you’ve chosen well and don’t sell too soon, you’ll probably do pretty well.

One of my favorite investments he ever made was in Visa and MasterCard. I think I was around 16 when I first came across it, and it just felt so obvious. It’s a bet on the American economy, on the global economy growing. But when you dig into Visa, you realize something incredible: they don’t even pay to make the physical cards — the banks do. So Chase or Bank of America covers that cost. That means there’s basically no cost to adding a new customer — it’s 100% gross profit. And you realize just how rare that is — finding a business like that with near-zero marginal cost.

Buffett’s appeal, for me, is really about those kinds of simple, intuitive ideas. But I’d also say my style leans a little more toward Munger than Buffett — especially Buffett in his later years. I’m not digging for hidden gems in obscure places. I’m looking for great businesses with strong stories that I can hold for a long time.

You recently formed a Special Purpose Vehicle — Drew Exchange LP, a Delaware Limited Partnership — to invest in the National Stock Exchange of India. From your perspective, what makes the NSE such an attractive investment opportunity?

Stock exchanges are really the backbone of equity markets. Every time someone buys or sells a stock, it has to go through an exchange — there’s no other real way to trade. That built-in necessity makes them incredibly powerful platforms.

When I was an analyst at another fund back in 2018–2019, I noticed that every extra resource in our office was going toward acquiring shares of the Tel Aviv Stock Exchange. I asked my boss why we were putting so much effort into it, and he told me something that stuck: when a stock exchange goes public, it’s a rare opportunity to buy into one of the best businesses in the world — often at a good price before the IPO. He also described it as a toll bridge business. Like credit card companies, stock exchanges take a small cut from every transaction — and as transaction volume grows, so does revenue.

That’s the base case: stock exchanges are just great businesses. Now, what makes the NSE so compelling is that it’s a dominant exchange in a rapidly growing emerging market. We haven’t really seen that kind of combination elsewhere.

Take the Bombay Stock Exchange — it IPO’d in 2017, and since then, it has returned about 2,000%, which is exceptional. The Tel Aviv Stock Exchange, which went public in 2019, has grown about 500% in six or seven years. So when an exchange goes public, it can deliver incredible growth, especially as more companies list and markets mature.

What’s unique about India is that, unlike other exchanges around the world, the NSE is restricted from doing things like selling its market data or running media arms like financial newspapers. It’s limited strictly to being an exchange. And despite that, it operates at over 60% profit margins. That tells you how powerful and efficient the business really is — and how much upside there still could be.

Let me play devil’s advocate for a second — what’s the moat? What’s stopping someone from hiring a hundred top IT people and building a competing exchange? What keeps a new player out of NSE’s territory?

You need a license.

Okay, but how hard is it to get one?

Extremely hard. The regulator — Securities and Exchange Board of India, SEBI — won’t issue a new license to anyone to open a competing exchange. The only reason NSE got one in the first place was because of the Harshad Mehta scandal in 1992. They wanted to clean up the system and create a fair, transparent trading environment.

When NSE came online, it was a game-changer — for the first time, people across India, not just in the big cities, could trade stocks with same-day, real-time execution. NSE grew so fast that the Bombay Stock Exchange couldn’t keep up. Now, to maintain some balance, the regulator is actually encouraging more trading flow back to BSE.

But as far as a third player? That’s just not going to happen — at least for now. The regulator has no incentive to introduce another exchange, and without a license, you’re not getting in. That’s NSE’s moat.

One question that’s bound to come up: how do we know these shares are legitimate? That you didn’t just print them in your basement with a home printer?

[Laughs] Fair question. I do a lot of verification before purchasing any shares. Once I identify who’s selling, we check that seller against NSE records. I’ve established a relationship with the investor relations team at NSE, and while they can’t facilitate trades, they will — over a couple of days — confirm whether the seller is a legitimate shareholder.

I also ask if they’ve heard that this particular shareholder is looking to sell, just to make sure everything aligns.

Who are your investors?

My investors are all based outside of India. SEBI is very strict about Indian citizens investing in Indian assets through foreign vehicles, so I don’t accept any Indian investors in the fund.

It’s structured as a Delaware Limited Partnership, and the shares are custodied inside India. We’ve registered everything properly — including a PAN card for the fund — to stay compliant. Most of our investors are non-Indians, although there are a few NRIs. But for the most part, it’s international investors who believe in the India growth story and want exposure without navigating the regulatory complexity of investing directly. The majority of them are in the United States.

The cool thing about the SPV is I put out the investment story and then people who think it’s interesting can put dollars towards it. The cool thing is that I don’t even view it as me doing any kind of investing. I view it as me just providing a service.

Does your SPV has a limit on the number of investors?

It’s 100.

Okay, and that’s for legal reasons, right? You can’t go over 100?

Right.

And it’s structured to be acceptable to institutions and retirement funds? I assume it’s an LLC, right?

It’s actually an LP.

You were born and raised in the U.S., but for this particular investment, you chose the Indian market over the American one. Why India?

My first job out of college was at a hedge fund that focused on Asian equities, and I was part of the India team. I split my time between L.A. and Mumbai for about two years, and I actually lived in Mumbai for six months while working there. That experience gave me a deep level of comfort with the Indian market. I understand the ecosystem, the business culture, and the dynamics — so when the NSE opportunity came up, it felt like a natural fit.

So after this SPV, can we expect more India-focused investments from you? Similar opportunities, maybe with other exchanges or financial institutions?

The SPV is a one-off situation because I believe there are a couple of things I’m providing that people can’t normally get. So I’m providing access to the Indian market through a structure that’s efficient. Normally, if you want to access the Indian market and you’re not of Indian descent, you would have to open an account that costs about $7,000 to $10,000 a year in maintenance. So if you’re a large company, it’s fine, but if you’re small, it doesn’t really make sense — or just an individual.

The second thing is that NSE is private right now. So even if you were to set up your account in India, you can’t just buy it on the exchange and purchase the shares you want and custodian in India and then not bother again. But because we have an IPO coming and we’re going from private to public, there’s a bunch more steps that are involved. So I felt it was a cool product to provide for people.

But I will continue to invest in India for now. I enjoy it. I love visiting the country. I have about six positions there right now in my typical Buffett partnership structure. And I see the SPV — I don’t envision myself opening new SPVs. It’s just this one for now. But I don’t want to say never, right? I just don’t see it in the future.

Let me ask you this — it kind of leads from the last point. Traditionally, people have invested in countries through sector or country-specific ETFs. Is that something on your roadmap?

I’m probably more open to creating an Indian vehicle with four or five companies I’ve selected — something curated for investors — rather than a broad ETF. But what I’ve noticed is, you know, if you’re running a business, you want to listen to your customers, right?

And the number of customers who’ve mentioned wanting something like an ETF has been maybe one or two. But the number of people who were interested in the SPV? Almost half my clients thought it was a great idea.

My clients are primarily high-net-worth individuals. Most of them also invest independently in their free time, so I think they really appreciate these one-off opportunities. They like that it’s targeted, specific, and different from what they’re already doing on their own.

How do you evaluate risk in an emerging market like India compared to the U.S.?

It’s a good question. It’s a totally different game. In the U.S., for the most part, you can buy a stock and — while there’s always some chance of fraud — it’s pretty slim. You still have to do your due diligence to make sure the numbers line up and everything is clean. But because it’s such an active market, and there are so many sell-side analysts covering all the major companies, you can have a certain level of comfort when investing in the U.S.

India does have sell-side coverage too, but it also has a much higher incidence of fraud. And it’s not always that business operators view what they’re doing as fraud — they see it as just how business is done. It becomes my responsibility to analyze whether or not it’s fraudulent.

I’ve met companies where there’s one listed entity and three unlisted ones. So we’ll meet the CEO and ask, “Why do you have that setup?” And he’ll say something like, “Oh, I move my assets around just to save on taxes.” He just moves things around as he sees fit. You’d never hear that in the U.S. or most developed markets — but in India, it’s just part of doing business.

What I’ve learned is that everyone has their own personal comfort level with fraud in India. Mine is basically zero. The type of fraud I’m most concerned about is anything that defrauds shareholders. So if you’re moving assets around, you’re essentially lying to me as an investor — and I can’t buy that equity. Even if you’ve cleaned things up later, if you’re still running the business, it’s not something I can touch.

What I do look at, especially in India where many companies are 60%, 70%, even 80% family-owned — which is rare in the U.S. — is whether they’re paying themselves a meaningful salary or dividend. If they are, I feel more comfortable.

Take Oberoi Realty, for example, one of my favorite companies in India. The Oberoi family owns about 67% of the company, and the dividend they pay themselves is the equivalent of $2 to $4 million a year in U.S. dollars. That tells me he’s running a clean operation. He’s paying himself properly, and if he drives around Italy in a Ferrari or Lamborghini, I know it’s being paid for out of his salary — not from siphoning off funds.

I feel very comfortable with owners like Vikas Oberoi who run clean operations and pay themselves well. He also uses less leverage than any other housing developer in India, which gives him the healthiest operating margins and very steady growth.

So when I look at risk, I ask: Are they paying a dividend? Are they compensating themselves transparently? Is there any sign of fraud? And I size my positions accordingly. For instance, what might be a 10% position in the U.S. for me is hard to make more than 5% in India — because of that elevated risk.

So what do you think of the Adani scandal?

Oh, not fun. I would not touch. That’s a watch from the sidelines. Eat your popcorn and don’t buy or sell that stuff.

Would you want to be a short seller? You would not?

No, I don’t. Short. Yeah, there’s no shorting.

Do you also look at startups that are preparing for IPOs — companies like Razorpay, Swiggy, Zomato — or do you focus only on large corporates?

Yeah, before NSE, I was only a public equity investor. I still consider myself a public equity investor. NSE just happens to be a $50–60 billion market cap private company — and it’s liquid enough, so I feel comfortable with it. All their financials are online, publicly available, and audited, so for me, it feels very similar to public equity investing.

With startups, I don’t like that I have to go into a data room and dig through information that’s not always standardized.

What about startups that are about to launch their IPOs?

Yeah, even those — I think they tend to get too high of a valuation, and they don’t offer the same kind of compounding that NSE has.

So, like Nykaa for example?

I love beauty. As a woman, I think I understand the beauty industry really well. But I think the Nykaa IPO was super overvalued. I don’t think the growth rate we could have expected would have justified that kind of valuation. So I find it harder to invest in IPOs — even in the U.S., I don’t really do IPO investing. I just think NSE is a very cool opportunity.

Could you share some insights into your current portfolio and investments? You mentioned other funds earlier as well.

Yes, I run funds modeled after the Buffett partnerships — they hold what I view as 10 core

investments, or 10 big bets.

About 50% of the portfolio is in the U.S., 30% is in India — which we can talk about — 10% in China, and 5% in Europe.

I think one of my favorite companies to talk about is Costco. It may seem boring because it’s a big company, but I think it’s one of the best investments. Everyone says it’s overpriced — 60 times earnings, only growing at 6% a year — and they say they should sell it. But I always tell them: you can’t put a value on culture.

During the Great Financial Crisis, Costco actually cut prices on essential household goods so drastically that they were taking a loss — simply because they believed the American people needed those items. No other company does that. And when you do something like that, you build a kind of goodwill with your customer that you can’t quantify.

Costco does especially well during recessions or difficult economic periods — when people become more cost-conscious, they actually spend more of their dollars there. And we’re likely going to see international expansion too, which adds to the growth potential.

Even their jewelry business is interesting — you can buy gold bars at Costco for such low margins. A lot of NRIs will go in, pick up a gold bar every week, stash it away, and sell it later when there’s a pricing arbitrage. It’s wild. The trust and goodwill they’ve built with customers is just incredible.

Do you prefer concentrated bets or a diversified approach?

I prefer a concentrated approach. We can’t make money if we don’t make concentrated bets.

What are some of the red flags you look for when evaluating a company or opportunity?

High levels of debt are probably the biggest red flag for me. I just know how ugly things can get when tough times hit. So I have a really hard time investing in any company that’s carrying too much debt.

I also tend to avoid industries that are extremely cyclical. It’s not that I won’t invest at all — but I find it harder to get the timing right, and I know that’s not one of my strengths compared to some analysts.

Another big one is alignment of interest. If the CEO isn’t getting paid in a way that corresponds with how the stock or company performs, that’s a huge red flag. If the incentives aren’t aligned, it’s hard to trust the long-term direction.

Let’s talk about startups. India’s startup ecosystem has exploded in recent years. Do you see yourself investing in the private or venture space right now?

Right now, no. I’m not opposed to it, but I just haven’t spent the time or been with the right people. When I go to India, I usually meet 40 to 50 companies on each visit — and they’re all public. So I’ve built a strong foundation in public equity investing in India, the U.S., and elsewhere. But with private investments, I find it a bit harder — it’s more confusing. You’re not just betting on the business; you’re really betting on the founder. And I don’t think I have a strong enough framework for founder investing yet.

What about angel investing? Maybe not as a VC or PE, but smaller early-stage checks?

Even harder. Angel investing is definitely founder-first. And unless it’s someone I’ve known really well — for 10-plus years or someone I went to school with — I’d only write a check out of trust, not based on a formal diligence process.

But I’m not assuming there’s going to be a return on that investment. That’s something I make from my personal accounts and that’s, it’s something I probably will. I’ve only written, I think one or two checks like that and it’s probably something I don’t think I will really continue. But I find it really hard to invest in any kind of non-public company if I don’t know the founders.

Monsoon, I have to ask the elephant-in-the-room question — your father, Mohnish Pabrai. Did you tap into his experience or investment philosophy? What would you say his approach is, and how has it influenced you?

Yeah, I think we have the same investment philosophy: long-term compounders that are mispriced. I would definitely say he’s a bigger Buffett fan than I am. I mean, he bid on that lunch! But he basically brought Buffett into the home I grew up in.

The Monopoly board I played with as a kid wasn’t a normal Monopoly board. It was a Berkshire Hathaway Monopoly board. The properties were Berkshire companies — Justin Brands, Dairy Queen, Borsheims, Nebraska Furniture Mart. The Chance cards had Charlie and Warren’s faces on them. So Buffett was a big presence early on, but I didn’t fall in love with investing until I was 19.

That happened when I was working at an endowment. The client was a nonprofit, which I thought was really cool — you’re not just making a wealthy person wealthier, you’re growing a school’s research fund, financial aid budget, or teacher salaries. At that time, it was UCLA, so a public university. I loved the idea of investing to grow something that benefited others.

That’s when I fell in love with investing. I went through every single fund they were invested in, reading all the annual letters going back 20 years. That’s how I learned how these guys think — and I say guys because, honestly, I don’t think there was a single woman’s letter in the batch I read.

They did have one lady, Tracy Britt Cool, who was hired by Buffett to run Pampered Chef at Berkshire Hathaway. She was a CEO. There are virtually no female fund managers that the Endowment had invested in that I recall. Actually, Warren and Charlie are very pro-women. But it’s a shame that we don’t have enough women in the investing world, for sure.

But yeah, I basically fell in love with investing when I was 19. Then I came home and I told my dad that I actually want to go and work at a hedge fund. And he was completely shocked. But he was excited.

Any thoughts about taking over your father’s fund someday?

No, it’s way more fun competing. Honestly, I’ve learned so much more running my own shop than I ever would have if I’d worked at Pabrai Funds as an analyst. I wouldn’t trade that experience for anything.

So how about bragging rights — any chance you compare your returns with your father’s?

We don’t really compare returns year over year. I feel lucky and blessed to have him as a mentor. I can call him anytime, and I know most young investors don’t have that kind of access. So I’m immensely grateful for it.

Also, when it comes to raising capital, having the last name Pabrai definitely helps. People are more likely to reach out to inquire about Drew, I’d never deny that privilege. It’s one of the reasons I was able to start my fund at 25, which is pretty rare — especially for women.

That ties into a bigger issue: we don’t see enough women in this industry, and part of that is because most people start funds in their 30s — which is also when many women are starting families. Being an entrepreneur and starting a family at the same time is incredibly difficult. There’s a real conflict between the career clock and the biological clock. So in many ways, it’s women who come from some degree of privilege who are in a better position to start their own funds.

That’s a very good point. Back when I graduated in the ’90s, most fund managers were in their late 20s — but the owners were in their 60s or 70s. The fact that you’re the owner of your fund, and a woman, and you did it so young — that’s impressive.

Yeah, and I’ve met some incredible women in the industry — but very few who own their own funds. Maybe two, and they’re in their 50s. Every time I speak with them, they’re incredibly helpful and supportive. I think it’s just so rare that we all try to show up for each other.

Do you use any leverage, options, or anything like that?

No leverage, no options, no margin, no shorting.

Okay—so it’s a clean approach?

Exactly—just a clean, straightforward strategy. Buffett and Munger would say those extra tools can get you into trouble. If you’re doing personal investing and you’re comfortable with them, that’s your call, but for my clients it’s not necessary.

All of my clients are high-net-worth individuals who made their money on their own, and I don’t want to introduce unnecessary risk.

Your fund, Drew Investment Management — are you the sole owner?

I’m the 100% owner. We have various funds under it.

So why the name Drew?

Oh, because I love Nancy Drew! I read all the books when I was around nine years old. I think investing is a lot like investigative journalism — it’s like being a detective.

In India, what do you think are some of the sectors that are undervalued or overlooked by global investors?

Oh, I don’t know if India is actually undervalued. The valuations we see in India are really high — it actually makes it a little hard to invest. I just think there’s incredible growth in the country, and that’s the lens I use when investing. So I look at sectors that do well in emerging markets.

You can look at infrastructure or cement, but those tend to be more cyclical. I do like real estate and financial services — I think those are great ways to play India. Then there are the typical “retirement” stocks — alcohol and tobacco companies. Regardless of your personal stance on them, they tend to be good investments.

I like hard alcohol companies in India too. That’s mostly because of how India taxes alcohol — they don’t tax based on alcohol content, but on fluid ounces. So beer ends up being expensive, and whiskey is cheaper for the same effect. That makes hard alcohol a more interesting play.

But when it comes to valuation, you have to be very patient and find a good entry point. I think of it like Munger’s candy shop analogy: Ben Graham would walk into a candy shop and pick the cheapest candy. Munger would find his favorite piece and come back every day until it was priced right. That’s how I view my Indian investments — these are gems that I’ve just had good entry points into.

(Kesav Dama is a serial entrepreneur and Angel investor based in New Yorker. In his former life, he was a wealth manager and is a long time admirer of Warren Buffett and Charlie Munger. )