ALCHEMY SELECT STOCK

Fund Snapshot

Investment Objective

To generate long-term returns by investing in equities and equity-related instruments across all market capitalizations.

Investment Philosophy

The philosophy behind growth investing is based on the assumption that India is a high-growth economy with a strong entrepreneurial culture. Our endeavor is to identify and invest in growth companies through a combination of top-down and bottom-up fundamental research to enable long-term wealth creation. A typical Portfolio generally consists of between 8 and 14 stocks across sectors. They may construct such concentrated portfolios as per the client’s need and understanding.

Investment Strategy

Invest in companies across the market capitalization range that have high growth potential and the potential to deliver long-term capital appreciation.

Investible Universe

From this relevant universe, an investable universe of companies is created based on assessment of past and future fundamental variables like revenue and EBIDTA growth, cash flow conversion efficiency and core ROE of the business, amongst several other relevant variables that may be unique to a business. In addition to objective fundamental parameters and assessment of qualitative management capabilities, the governance standards and competitive ability of the business are also assessed. A comprehensive valuation exercise is also carried out based on one and/or a combination of valuation parameters like P/E, P/B, EV/EBIDTA, DCF etc to arrive at an acceptable valuation range for investing in the security.

Portfolio Construction

The Portfolio Manager managing the strategy is then free to construct the Clients Portfolio from within the investable universe at its discretion.

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Relevant Universe

They have identified a relevant universe of about 500 companies based on market capitalization (above 1,000 crores preferably), qualitative governance filters, long term attractiveness and ROE profile of business, amongst other parameters.

Combination of top-down & bottom-up stock picking and High Conviction 

A demonstrable long-term track record of finding winners with a deep understanding of the businesses and the drivers of long-term sustainable performance in companies, which may then translate into long-term return performance.

Over diversification dilutes returns

A well-diversified portfolio is essential to capture a wide variety of businesses; too much diversification tends to dilute returns. A concentrated portfolio helps to focus more on individual stock performance and returns.

A differentiated strategy for UHNI, Family Offices & Large allocators

A slice of the capital allocated to a concentrated strategy makes eminent sense, as the investors are already diversified, and a differentiated strategy can help generate differentiated returns.

Performance Highlights

• Group AUM is over USD 1.2 Billion
• INR 1 crore invested in May 2002 in Alchemy High Growth could have grown to over INR 70.9 crores
• Outperformed its Benchmark (**BSE 500 TRI) 15 out of 23 calendar years#
• Generated a net annualized alpha of  +322 bps# (INR returns)

Sector Allocation

Top Holdings

Market Cap Allocation

Ratio Analysis

CAPITAL MANAGEMENT

Alchemy Capital Management is one of the pioneers in providing bespoke Portfolio Management Services in India. The company is registered with the Securities and Exchange Board of India (SEBI) as a Portfolio Manager and is based out of Mumbai.

• One of the few Portfolio Managers in India to have been in existence since 2002
• Pioneers in bottom-up stock-picking skills with a long-term investing approach
• With an experienced team of investment professionals at the helm, there is a strong emphasis on Compliance and Risk Management
• Managing/advising AUM of USD 1.2 billion*, Alchemy has earned the trust of institutional investors, sovereign funds, ultra HNIs and family offices.

Investment Process Philosophy

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.

Robust Financial Metrics

Alchemy-like businesses that address large and growing external opportunities have a competitive advantage in effectively exploiting those opportunities and have a scalable business model with a higher-than-average Return on Capital Employed (ROCE) over the investment horizon.

Strong Growth Fundamentals

While growth companies form the core of the portfolio, Alchemy also tactically invests in deep value opportunities and special situations that may appear due to and during market cycles.

Exceptional Management Teams

Alchemy believes that management teams are key to business success. Alchemy looks for managements that have aggression and are aligned to business outcomes while simultaneously having respect for governance and capital allocation.

Discover how process-driven investing with AltPort delivers consistent market performance.

MATRIX: IDEA, INVESTMENT, INTERVENTION

Idea Generation

• Universal Tracker
• Network Inputs
• Independent Channel Check
• Active Tracker

Investment Process

• Idea Generation
• Research & Analysis
• Investable Pool
• Portfolio Construction
• Review and Monitoring
• Exit Strategy

Intervention

• Investment Team
• Risk Management
• Investment Committee

INTERVENTION: RISK MANAGEMENT

Firm Level

• Performance pattern analysis.
• Dedicated pre- and post-trade checks and ongoing internal reviews. 
• Statutory and legal risk is managed by the compliance and legal function, which is monitored by the Group Compliance Head.
• Business Risk managed by the CEO.

Portfolio Level

• Daily monitoring by the in-house operations team is based on the fund/strategy mandate.
• Fund Manager evaluates the performance of each strategy vis-à-vis the benchmark on a monthly basis.
• The CIO reviews the performance of each strategy with the respective fund manager every month.
• Contribution is conducted each month by the investment team. Portfolio action on absolute and relative performance analysis and portfolio positioning are discussed every month and actions, where needed, are decided upon.

Security Level

• Sectoral limit based on mandate.
• Individual stock limit based on mandate.
• We also monitor the ownership in companies at Fund/Strategy level.
• Investment positions – flags raised by the operations team if a position is close to the maximum permissible limit weightage.

AltPort: Investing with Insight and Integrity

At AltPort, we’re all about picking funds that are ethical, well-vetted, and top-notch. Our team does the homework—checking out the managers, how well their ideas fit, and how they handle risk. What you get are portfolios that mix potential gains with solid safety. AltPort is the place for investors who want to feel good about where their money is going. You can be sure that every choice is based on careful planning and honesty. Your investment experience should have this level of trust.