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Alchemy Leaders of Tomorrow AIF

Scheme Rating

IME Scheme Rating

3 of 5 stars

Can be considered for investments: While there may not be anything specifically wrong with the fund and the fund house per-se, based on our combined evaluation of it’s longer-term performance, the AMC’s pedigree (specifically within the funds category), the pedigree of the core investment team, the fund’s maturity and other such factors, there are other funds within this category that we believe to be better investment options.

IME Strategy Rating

4 of 5 stars

Highly flexible strategy: Unlike certain peers who have tightly defined investment strategies, Alchemy has a more flexible approach. This is both good & bad. It allows for the fund manager to pivot strategies in dynamic market conditions, but it leads to a lower level of clarity on the exact nature of likely investments. While the core investment philosophy remains similar to the Alchemy PMS offerings, the AIF includes the potential to invest in pre-IPO opportunities that have the potential to deliver higher upsides (though with a higher level of risk).

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 Leaders of Tomorrow AIF

Type: Flexi Cap | GARP | AUM (608 cr) | Inc Date (3 Jan 2018)

Investment Philosophy

The strategy aims to invest in a) Listed equities, b) Private investment in public equity placements, and c) IPO and pre-IPO opportunities. The strategy is sector agnostic with a focus on “Growth at a Reasonable Price”.

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.

STRATEGY

Alchemy ‘Leaders of Tomorrow’ focusses on multiple macro-trend that is driving value creation. These trends can be broadly classified as ‘Unorganised to Organised’. 

MAJOR CHANGES IN THE ECONOMY (2013-17)

  • Aadhar
  • Direct Benefit Transfer
  • GST
  • Online Commerce
  • RERA
  • Bankruptcy Code
  • Demonitization

Impact of major changes in the Economy

  • Challenges to unorganised companies as price-to-quality perception gap erodes
  • Changes in behaviour and curtails demand for discretionary/luxury goods
  • Financialisation of savings

Trailing Performance

1yr 3yr 5yr Since Inception
Alchemy Leaders of Tomorrow AIF 52.9 26.1 30.1 19.6
S&P BSE 500 TRI 41.1 18.4 22.4
Alpha over Broad Mkt BM 11.8 7.7 7.7 19.6
Nifty 500 40.2 17.2 21
Alpha over Category BM 12.7 8.9 9.1

Performance as of: 31-Aug-24 | Inception Date: 03-Jan-18

Fund Managers

Fee Structure

Fee StructureFee
Fixed Fee Structure
Variable Fee Structures1.5% + 15% over 10% hurdle rate, including High Water mark provision
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.

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