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Alchemy High Growth Select Stock

Scheme Rating

IME Scheme Rating

3 of 5 stars

Reasonable Flexi-cap Strategy: While performance has not been as strong as some of our other top-rated Flexi-cap strategies, Alchemy High Growth Select Stock benefits from the benefit of being run by a seasoned & experienced co-founder/CIO. We need to see this reverse in order to consider investing in this scheme. We believe that given Alchemy’s strong pedigree, that underperformance should be addressed going forward. Initial signs of this recovery are evident since CY23.

IME Strategy Rating

4 of 5 stars

Style drift: The strategy aims at a Multi-cap strategy that follows a ‘top-down’ and ‘bottom-up’ stock-picking approach. The strategy is relatively flexible in terms of definition, allowing the fund manager to shift between investment styles & market capitalizations based on the best opportunities in the market at a specific point in time. But it lacks a clearly defined investment style. The naming is also a bit unclear, while ‘Select Stock’ hints at a concentrated strategy, the actual portfolio is highly diversified.

PMS Scheme Ratings are driven by IME’s Proprietary Scheme Rating Methodology, which takes into account our ratings of the Scheme’s investment strategy, its maturity, the investment team, and our separate rating on the AMC that runs this particular scheme. Our views on each of these individual criteria are available via the IME RMS – which you can view by reaching out to one of our relationship managers (using either the live chat or book appointment feature on this site).

IME View on Alchemy High Growth Select Stock

Type: Large & Midcap | GARP | AUM (3854.8 cr) | Inc Date (19 Dec 2008)

Investment Philosophy

Alchemy High Growth Select Stock follows a concentrated focused strategy (the usual portfolio will have between 8-12 stocks), that aims to invest in only the top ideas of Alchemy’s investment team. Similar to Alchemy High Growth, the investment strategy is flexible and allows the fund manager to shift between investment styles & market capitalizations based on where the best opportunities are presented.

Alchemy Investment Process is driven by the ‘3 I-Matrix’

  • Idea Generation: Track larger investment universe of 500 companies with detailed understanding of 100-150 companies. Along with actively tracking the larger universe, idea generations happens through network inputs (independent company/sector feedback, interacting with peer group, and from sector conference).
  • Investment Process: Investment process managed by the CIO with veto power at various stages of the research process. Continuous monitoring and periodic reviews of the position on a quarterly basis.
  • Intervention: Intervention based on CIO’s veto power in portfolio construction, and exit strategy.

Exit strategy based on risk-reward outlook, better opportunities, and/or hypothesis not playing out.

Trailing Performance

1yr 3yr 5yr Since Inception
Alchemy High Growth Select Stock 47.5 22.6 16.8 20.4
S&P BSE 500 TRI 39.5 19.5 19 72.6
Alpha over Broad Mkt BM 8 3.1 -2.2 -52.2
Nifty 500 38.4 18.1 17.5
Alpha over Category BM 9.1 4.5 -0.7

Performance as of: 28-Feb-23 | Inception Date: 19-Dec-08

Fund Managers

Hiren Ved | 5-star rated FM

CIO | 33 yrs Experience | 25 yrs at current firm

Past Experience: Prime Securities (Head – Equities), KR Choksey (Head of Research)

HIren is a very seasoned investment professional, with close to 3 decades of investment experience. He co-founded Alchemy Capital Mgmt in 1999, helping build it into one of the leading PMS’s in the country, on the back of long-term stability in the investment management team and strong alpha generation over time.

Fee Structure

Fee StructureFee
Fixed Fee Structure2.5
Variable Fee Structures1.5% fixed + 15% above 10% hurdle
Exit Fees1yr(1%)

AMC

AMC: Alchemy PMS (click link for detailed AMC review)

Not a top recommendation (at this time) due to weak recent performance: Backed by solid founders, a CIO that is a co-founder and well-respected investor and a long track record of identifying interesting bottom-up investment opportunities, Alchemy has all the ingredients for a successful PMS business. However, their performance has been very sub-par in recent years, and it is this underperformance that is the primary reason behind Alchemy not being a 5 or 4-star rated PMS.

AMC Rating

3 of 5 stars

AMC Pedigree

4 of 5 stars

AMC Size

4 of 5 stars

Team Pedigree

5 of 5 stars

Inv Philosophy

3 of 5 stars

Performance

3 of 5 stars

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Note: PMS AMC & Scheme Reviews and Ratings are based on IME Capital’s Proprietary Review and Rating Methodology (read more here: AMC Rating & Scheme Ratings). These reflect the unbiased views of our central research team, based on our assessment of the investment value of these PMS/AIF strategies for our investors. We follow a highly stringent rating-criteria, where approximately 50% of PMS AMC’s & strategies would be rated 2-star or below (this is not meant to indicate that these funds are not investment-worthy, but that they do not currently fulfill the requirements we focus on for recommending funds to our investors — based on our internal views on the merit of the AMC/strategy relative to peers). Reviews & Ratings are primarily based on research of publicly available information (SEBI disclosures, PMS websites, PMS-aggregation platforms, webinar recording, media interviews etc.) and no explicit consent is required from AMCs for the same. While we endeavour to do further due-diligence via direct interactions with the investment teams of AMCs, this is typically restricted to AMC’s that meet our foundational fund selection criteria (reviews on lower-rated AMCs are often based solely on publicly available information). The views reflected in our Reviews & Ratings, are our independent views and may not be shared by the AMC’s and the investment teams. Please read detailed disclaimer for more.