Alchemy Capital Management is one of the leading providers of bespoke Portfolio Management Services in India. Established in 1999, the SEBI-Registered firm. Alchemy caters to high-net-worth individuals, family offices and institutions. Managing and advising an AUM worth over USD 931 million, the firm serves a client base of 1850+ families as of June 30, 2023.
Pioneers in bottom-up stock picking approach, Alchemy places a strong emphasis on thorough research and long-term investments. Guided by a disciplined investment approach, the company aims to deliver sustainable returns. With a legacy of over 20 years, Alchemy has built a reputation for trust, integrity, and expertise. Its stable and experienced team of investment professionals possesses deep industry knowledge, enabling the firm to navigate market cycles and trends successfully.
|Year of Inception
|Number of Stocks
|Mr. Hiren Ved
- Concentrating on top choices from the Alchemy team’s well-regarded bottom-up stock-picking abilities certainly looks like an intriguing high-risk, high-reward strategy. A flexible strategy enables the fund manager to switch between investing philosophies and market capitalisation in accordance with the greatest prospects.
- The investing team, ideology, and process are stable since they have a seasoned and well-respected co-founder. CIO and fund manager have extensive equities investment experience.
- High expansion Long-term performance of a particular stock was also strong, and it was able to maintain a position in the top 1 or 3 quartiles. However, recent years’ underperformance has reduced the favourable trailing return. This recent underperformance is not something we consider to be systemic. We favour Alchemy’s multicap-focused approach, particularly its selection of high-growth stocks.
- India is one of the nations with the quickest economic growth. It has the entrepreneurial reserves to take advantage of chances by using a “Top-Down” and “Bottom-Up” strategy to stock selection with an emphasis on superior risk-reward.
- A typical portfolio consists of 8–12 stocks from several industries; one stock exposure is limited to no more than 25% at cost.
With a mid-cap bias, long-term returns will be generated by investing in equities and equity-related instruments across all market capitalisations.
Suitability for Investment
- Appropriate for an investor looking to participate in India’s growth story through equities.
- Long-term investment horizon: 3 to 5 years is an ideal investment horizon.
- High-risk, high-reward strategy.
Combination of top-down and bottom-up stock selection, as well as high conviction
The Alchemy High Growth Select Stock (AHGSS) strategy capitalises on Alchemy’s strengths in top-down and bottom-up research and stock selection. Alchemy’s investment team has a proven track record of finding winners over time. True characteristics of finding winners necessitate a thorough understanding of the business. The drivers of long-term sustainable performance in organisations can then be translated into long-term return performance.
It can affect the company’s entire growth cycle because we understand its business and value drivers. A long-term investment strategy allows us to benefit from profit growth and prospective business assessment re-rating, which may result in superior returns.
Over diversification dilutes returns
Markets are cyclical, oscillating over time between a bull, bear, and sideways/consolidated phases. While a well-diversified portfolio is necessary to capture a diverse range of businesses, excessive diversifying tends to dilute returns, except in a roaring bull market where the tide lifts all boats. However, markets frequently experience short periods of bull and bear cycles with long periods of sideways to consolidation in a range.
A concentrated portfolio allows investors to focus more on individual stock results and returns, limiting the correlation to broad market overall index returns over time.
A distinct strategy for UHNI, FO, and large allocators
In our experience, most large investors, such as UHNIs, Family Offices, and large allocators, already have broad market exposure through direct investing, allocation to MFs, and PMSs. As a result, allocating a portion of capital to a concentrated strategy makes perfect sense because the investor is already diversified, and a distinguishable strategy can generate additional differentiated returns.
|Highly focused on stock selection than on market cap allocation.
Overweight in specific stocks of high conviction.
In general, the concentrated portfolio consists of 8 to 12 stocks.
|Allocation across Market Cap
|Unto 100% in equity (cash portion may be deployed in liquid funds or debt securities).
|Minimum Ticket Size
Basis of selection of types of securities as part of the investment approach
- Tracking Universe — Based on market capitalization (ideally over 4000 crores), qualitative governance criteria, long-term attractiveness, and company ROE profile, we established a tracking universe of roughly 400-425 firms.
- Investible Universe – Based on past and future fundamental variables such as revenue and EBIDTA growth, cashflow conversion efficiency, and core ROE of the business, as well as several other relevant variables that may be unique to a business, an investible universe of companies, is created from this tracking universe. In addition to objective fundamental metrics and qualitative managerial competencies, governance norms and the business’s competitive capacity are assessed. A full valuation exercise is also performed using one or more valuation parameters, like to arrive at an appropriate value range for investing in the securities, use P/E, P/B, EV/EBIDTA, DCF, and other methods.
- Portfolio Construction – the strategy’s Portfolio Manager is then free to build the Client’s Portfolio from the investible universe at his leisure.
Investment Objective & Strategy
» To generate long-term returns by investing in equities and equity related instruments, across all market capitalizations with a mid cap bias
» Invest in companies across the market capitalization range, which have high growth potential and potential to deliver long-term capital appreciation
About Fund Manager
Mr. Hiren Ved -Co-Founder and Whole-Time Director
Hiren Ved, an equity market veteran, serves as the Whole-Time Director and CIO at Alchemy Capital Management where he has been leading the firm’s Asset Management business. With over 30 years of experience in the Indian equities market, Hiren has developed a sustainable long-term investment philosophy based on fundamental research. He is known for his deep sector knowledge, bottom-up research skills and stock picking abilities. Hiren manages and advises funds over USD 931 million (as on June 30, 2023) across domestic PMS and offshore institutional mandates for Alchemy Capital. He holds a graduate degree in Accounting from Mumbai University and a post-graduation in Management & Cost Accounting from The Institute of Cost Accountants of India.
Alchemy Investment Philosophy is “Growth at Reasonable Price“. The philosophy behind growth investing is based on the fact that India is a high growth economy with a strong entrepreneurial culture. Our endeavour is to identify and invest in growth companies through a combination of top-down and bottoms up fundamental research to enable long term wealth creation. A typical portfolio may generally consist of between 8-12 stocks. We may construct such concentrated portfolios as per the clients need and understanding
Disclaimer: Investing Involves Risk. This document is for information purposes only and should not be viewed as a legal offering document or solicitation. Offers to invest in this fund are made only by the Discretionary Portfolio Management Services Agreement. Past performance does not guarantee future results and there is no assurance that the managed accounts will necessarily achieve their objectives. We do not guarantee any returns in the hand of investors not we take any sort of accountability for the performance of the scheme. The above-mentioned data is collected from the respected Fund house please verify the same at SEBI website.