Alchemy Alternative

Funds managed

Fund nameAsset ClassLicense
Alchemy Leaders of TomorrowHedge fund
(Long only)
SEBI AIF Cat 3
Alchemy High GrowthEquity Diversified (multi-cap growth)PMS
Alchemy High Growth – Select StockEquity Concentrated (multi-cap growth)PMS
Alchemy LeadersEquity Diversified (large –cap growth)PMS
Alchemy AscentListed Equities (multi-cap growth)PMS

https://cafemutual.com/news/cafe-alt/18190-one-year-performance-of-long-only-aifs

(Alchemy Leaders of Tomorrow is long only found via the above mentioned link.)

About

Started in 1999 by Lashit Sanghvi, Ashwin Kedia, Rakesh Jhunjhunwala and Hiren Ved

Alchemy Capital Management Pvt Ltd. registered as a Portfolio Manager with SEBI and started its asset management business in 2002.*

The group (including Alchemy India’s Singapore subsidiary) AUM is over USD 1.05 billion.*

Key staff

  • Amit Nadekar (CA by profession, started on Sell side, later moved to corporate strategy) manages Alchemy High Growth PMS
  • Hiren Ved (Certified Cost Accountant) manages Alchemy High Growth – Select Stock PMS and Alchemy Leaders of Tomorrow AIF CAT 3
  • Amit Nadekar (CA by profession) manages Alchemy Leaders PMS
  • Vikas Kumar (BA in maths from Delhi University, worked with Dalal & Broacha Stock Broking and collaborated at Reliance Capital) manages Alchemy Ascent PMS

Investment Philosophy (for firm)

  • Alchemy is one of the pioneers in Bottom-Up stock selection whereby companies can perform and realize their full potential irrespective of industry conditions
  • A good understanding of trends and latest market developments
  • Considers primary research inviolable for a comprehensive evaluation
  • Consistent and outstanding track record; initial investment of Rs.1 crore in 2002 has grown to Rs. 36.3 crores as on 31st December 2019 in Alchemy High Growth product.
  • They believe that consistent and superior long term absolute returns can be made across market cycles by investing in growth companies with good management teams.*
  • They like businesses which address large and growing external opportunity, have a competitive advantage in effectively exploiting those opportunities and have a scalable business model with higher than average Return on Capital Employed (ROCE) over the Investment horizon.*
  • Alchemy’s Investment Philosophy is “Growth at Reasonable Price” which is rooted in the premise that India is a high growth economy and the best way to play this is to identify and invest in companies best equipped to take advantage of emerging domestic and global opportunities.**

Fund specific strategy

 Alchemy Leaders of Tomorrow aims at capital appreciation over the long run by investing in listed equities, Private Investment in Public Equity on listed Indian equities (PIPES) and IPO opportunities that have successfully adapted to the dynamic economics of their businesses through focus on innovation and ingenuity.

Alchemy High Growth*

Investment Objective

  • The strategy aims at generating long term returns by investing in equities and equity related instruments across market capitalizations, with a Mid cap bias.

Investment Suitability 

  • Suitable for an investor who is looking to participate in India growth story through equities.  
  • Seeking High Risk-High return portfolio.
  • Ideal investment horizon is 3 to 5 years.

Media

Title: Alpha Moguls With Alchemy Capital’s Hiren Ved, Source: Bloombergquint, Date: 03 January 2019

https://www.youtube.com/watch?v=ProRvrnVkVY

2018 is like Dejavu bringing memories of 2013. Small and micro will not contribute as they are in their peaks. Large cap and larger mid caps will lead the market. Alchemy focuses on specific companies with strong balance sheet i.e engaging in stock picking (bottom-up) with growth orientation.

Title: Alchemy High Growth explained by Mr. Chandraprakash Padiyar (Fund Manager-Alchemy Capital), Source: Alchemy Capital (Youtube), date: 21 September 2017

https://www.youtube.com/watch?v=XccqkmH9cC4

Fund manager discussed the strategy behind the alchemy high growth fund, it is a multicap with mid cap bias, 15 yrs old fund offering a CAGR of 26%. They are stock pickers and benchmark  agnostic. Investment philosophy- growth focused, companies with strong balance sheet , positive free cash flow, reasonable valuations(GARP)

Title: Alchemy High Growth Select Stock explained by Mr. Hiren Ved, Source: Alchemy capital (Youtube), Date: 21 September 2017

https://www.youtube.com/watch?v=8iUYIyw_Xk4

Fund manager discussed the strategy behind the alchemy high growth select stock, it is market cap agnostic, relatively concentrated (8-12 stocks) to tap HNI, family offices to leverage their  expertise in stock picking , also because they believe in long run diversified fund tend to replicate market but with concentrated portfolio they believe will be able to generate alpha. Money received from investors is allocated over a period of time (30-60 days) in order to build a portfolio.

Analyst questions

  • This pandemic has caused economic and emotional suffering to various economies , largest economies are bleeding and will be seeking to retaliate, do you think India is in position to take advantage of the situation? Are we in position to gain trust of the FIIs? What will be the impact in the long run if we are able to leverage and make most of the situation, especially in the alternative investment segment of the country?
  • Why do you focus on investing in PIPE deals? Can you share with us the problems that you face in PIPE deals?
  • Being long only, where do you have a competitive advantage over the peer long only funds? Do you have information, analytical or behavioral advantage?
  • How do you allocate the fund amongst listed equities, PIPE and IPO Opportunities?
  •  How do you ensure due diligence of the entire fund allocation process?
  • How often do you perform valuation of the hedge fund, is it done internally or outsourced?
  • What is the risk matrix that you take into consideration while evaluating risk undertaken by this fund?
  • Has there been an instance when the CIO has exercise his/her VETO power to alter the portfolio and what was the reason?*
  • What is your thought process behind having 3 Multi cap growth funds?*

Prepared by Rashika Bhatia, 2020

Peer reviewed by Karan Das, May 2021

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