Alchemy India Long Term Fund Ltd

30 Pages·2016·0.96 MB·English

by  Dhruti Hemani

Alchemy India Long Term Fund Ltd
Table of Contents
• Fund Highlights
• About Alchemy
• Philosophy & Process
• The Investment Philosophy
• The Fund Strategy
• Fund Positioning and Performance
• The Investment Team
• Idea Generation Process
• Portfolio Construction
• Review, Risk Monitoring & Exit
• Key to Alpha Generation
• Fund Details
• Appendices
1
Fund Highlights
• Alchemy India Long Term Fund (the “Fund”) is a long short equity fund with long bias,
the objective of the fund is to generate absolute returns over a market cycle.
• The Fund started in June 2008 and now has over 8 year track record.
• Since inception, the Fund has outperformed S&P BSE500* by a net annualized
+789bps**.
• Alchemy Investment Management Pte. Ltd. (Alchemy Singapore) is the fund manager,
which receives non binding advice from Alchemy Capital Management Pvt. Ltd.
(Alchemy India).
• The Fund Manager is advised by a stable and experienced investment team, a bottom
up investment philosophy, a consistent investment process and a strong support team.
USD-adjusted performance of S&P BSE500 .
*S&P BSE500 is a rules-based broad index designed to measure the performance of the top 500 companies in India)
**As of 30-June-2016, past Performance is not the indicative of future performance
2
About Alchemy
• Alchemy India started its asset management business in 2002
• The group* has over 14 years of consistent track record
• The group AUM is over $ 524mn**
• The group has a very stable and experienced team of investment professionals with
experience of managing funds through bull and bear cycles.
• Alchemy High Growth, the flagship strategy of Alchemy India, has out performed its
benchmark^ 12 out of 14 calendar years generating a net annualized alpha of +897
bps^^ (INR returns)
• The investment team is well supported by an experienced Risk management,
Compliance and Operations team.
*Group Includes Alchemy Singapore and Alchemy India
**As of 31-May-2016
^S&P BSE500 index -
^^As of 30-June-2016, Past Performance is not the indicative of future performance
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The Investment Philosophy
We believe that consistent and superior long term absolute returns can be made across
market cycles by investing in growth companies with good management teams.
• We 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)
• We believe management teams are key to business success. We look for managements
which have aggression, are aligned to business outcomes while simultaneously having
respect for governance and capital allocation
While growth companies form the core of our portfolio, we tactically also invest in deep
value opportunities and special situations that may appear due to market cycles
The Fund’s investment program entails substantial risks and there can be no assurance that its investment objectives will be achieved.
4
Fund strategy
• Fund Objective: The Fund is a long short equity fund with long bias with the objective
to generate long term absolute returns on investor’s capital.
• Long strategy: The Funds’ investment strategy involves taking long term concentrated
positions in public listed equities without being benchmarked to any index. The Fund is
sector and market cap agnostic.
• Short Strategy: The Fund does not seek to be consistently hedged/short. However, the
fund would seek to take opportunistic short calls to hedge a part of the portfolio either
by way of options and/or futures on the index or individual stocks.
• Portfolio: The Fund will primarily invest in listed Indian equities but from time to time
may seek investment opportunities in PIPES, IPOs and Pre-IPOs.
*The investment objectives are merely a target and there are no assurances that it will be achieved
*The proposed strategy is subject to Risk Factors and provisions of the PPM. For complete details, please refer the PPM and its supplements.
5
Why a Long Biased Strategy?
• India is a growing economy, with strong long term macro and micro credentials. We
believe the best way to benefit from India’s long term secular upside is through a long
biased strategy.
• The strategy not only helps us to benefit from a rising market like a long only strategy
but also affords flexibility to manage company specific and market specific risks by
hedging the portfolio through shorting certain indices or stocks while simultaneously
keeping the core portfolio intact.
• A long biased manager is able to generate alpha by better focus on underlying
companies as he is not as concerned with market timing issues like a typical long short
equity manager or working against secular long term trends like a market neutral equity
manager, which is challenging in a volatile market like India.
6
Fund Positioning & Performance
AILTF Annualized BSE 500
Period Portfolio Concentration
Returns# Returns(*)
1 Yr -2.1% -4.6% No. of stock holdings 28
2 Yr 10.9% 0.1% Top 5 stocks 29.7%
3 Yr 23.9% 10.8% Top 10 stocks 46.9%
5 Yr 7.7% 0.1%
Highest exposure 8.0%
Since Inception 10.1% 2.2%
Inception Date: 10th June 2008
Weight by market cap (%)
GICS Sector Allocation Weight (%)
Greater than USD3bn 30.0
Financials 27.2 Between USD357mn & USD3bn 36.3
Industrials 26.9 Less than USD357mn 25.0
Consumer Discretionary 21.3
Total 91.2
Information Technology 6.3
Health Care 4.9
Net Exposure (%) 91.2
Materials 3.0
Energy 1.7
*USD-adjusted performance of the benchmark S&P BSE500 index
Total 91.2 #Past Performance is not the indicative of the future performance.
Data as on 30-June-16
7
Investment Team
Atul Sharma Hiren Ved
Portfolio Manager (Singapore) CIO
Experience: 22 years Experience: 24 years
m
Year of Joining Alchemy:2015 Year of Joining Alchemy:1999
a
e
T m Sachin Shah

t a
n Portfolio Manager
e
e T
m Experience : 16 Years
y
t r Year of Joining Alchemy : 2004
s o
e s
v iv Chandraprakash Padiyar
n
d
I A Portfolio Manager
e
r a Experience: 15 years
o
i
p d Year of Joining Alchemy: 2007
a n
g I

n y Amit Nadekar
i m
S
Portfolio Manager
e
y
m h Experience : 15 years
c
e lA Year of Joining Alchemy: 2005
h
c
lA Darshan Engineer
Analyst
Experience: 7 years
Year of joining Alchemy: 2011
Alchemy India provides non binding advisory services to Alchemy Singapore
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Key Responsibilities- Investment Team
Alchemy India Alchemy Singapore
• Research Advisory and • Idea Generation
Support
• Portfolio Construction
• Portfolio Review &
Management
9