Sundaram Alternates S.E.L.F
Sundaram Alternates PMS | Equity | | PMSIME's View on Sundaram Alternates S.E.L.F
Strategy
Focused Approach on core themes
Investment Fund
Sundaram SELF is a reasonable investment option amongst Flexi-cap funds, having a long track record and benefiting from Sundaram's niche of South-based small&mid-cap companies.
Fund's Strategy View
Tightly defined strategy in terms of focus themes, asset-light, and free cash-generating business. Strategy fairly closed followed in actual practice. A moderate level of diversification (20-25 stocks) is reasonable given the higher volatility of mid-caps. The strategy focuses on themes - consumer discretionary, financial services, chemicals, and cement. The strategy has matured successfully with its flexi-cap strategy, focusing on mid and small-cap companies positioned to transition into the large and mid-cap segments.
Fund Performance
Fund returns are largely in-line with category average returns over the past 5 years. In terms of longer-term annual performance, performance has been consistent, with the fund having outperformed it's benchmark in over 60% of annual calendar years.
IME's View on Sundaram Alternates PMS
View on AMC
Sundaram Alternates PMS is a mature provider specializing in small- and mid-cap strategies, offering differentiation compared to larger AMC-promoted PMS firms. However, like many MF-promoted PMSs, it faces structural limitations, and recent churn in the investment team raises additional concerns. While its pedigree and past performance are notable, we currently do not recommend the PMS.
AMC's Pedigree
Sundaram is a mid-sized AMC specializing in small and mid-cap investments, particularly for South India-based businesses.
AMC Team
Madanagopal, who had been with Sundaram AMC for seven years and played a key role in building its PMS division since 2018, has recently exited the firm. A replacement has not yet been identified, which raises concerns given our earlier view that investment team churn is a recurring risk at MF-driven PMS platforms, particularly where fund managers do not hold significant equity ownership.
Investment Philosophy
Investment philosophy is not clearly defined at the PMS level, but at the portfolio level, strategies are well-defined and strictly followed compared to other AMC peer PMSs.
Investment Philosophy
Sundaram PMS’s SELF (Sundaram Emerging Leadership Fund) strategy is a mid-cap (stocks less than 50,000 cr mkt cap) with a moderate level of concentration (20-25 stocks). It seeks to invest in companies that have the potential to transition from small-cap > mid-cap > large-cap, with a focus on asset-light and high cash flow generating businesses. The strategy also focuses on 4 specific themes – consumer discretionary, financial services, chemicals & cement. Sundaram self aims to generate capital appreciation with investment in mid and small cap companies across sectors with around 25 stocks by following its “3Q” approach to stock selection:- Quality of business: Scalability, self sustaining business models, Differentiating factors in business
- Quality of financials: Ability to double earnings in 4-5 years, min-ROIC of 15%, OCF/EBITDA>50%, D/E< 0.5x.
- Quality of Management: Track record, vision, high sustainable growth, identifying and investing in profitable opportunities, good corporate governance
Trailing Performance
| 1yr | 3yr | 5yr | Since Inception | |
|---|---|---|---|---|
| Sundaram Alternates S.E.L.F | 1.2 | 13.8 | 20.1 | 17 |
| S&P BSE 500 | -6.6 | 14.7 | 19.2 | 12.6 |
| Alpha over Broad Mkt BM | 7.8 | -0.9 | 0.9 | 4.4 |
Performance as of: 30-Sep-25 | Inception Date: 01-Jun-10 | Performance are post-fees, pre-taxes. Global funds denominated in USD or fund currency.
Investment team
Karthik Athreya | 3-star rated FM
FM (Alternatives) | 27 yrs Experience
Past Experience: Altico Capital, Clearwater Capital, Rabo, Arthur Andersson, PWC, Yes Bank
Karthik Athreya is in charge of the Alternative Financing strategy at Sundaram AMC. He has almost 22 years of expertise in corporate finance, investment banking, and principal investing. Prior to this, He established Altico Capital and oversaw Clearwater Capital’s India division. He worked at Rabo, Arthur Andersson, and PWC before becoming a founding employee of Yes Bank.
