Sundaram Alternates SISOP
Sundaram Alternates PMS | Equity | | PMSIME's View on Sundaram Alternates SISOP
Strategy
Investment Fund
Can be considered for investors seeking a concentrated Large & Mid-cap portfolio, with a proven long-term track record.
Fund's Strategy View
Sundaram SISOP (Sundaram India Secular Opportunities Portfolio) is a multi-cap (skewed towards large-cap), concentrated (~15 stocks), and sector-agnostic portfolio. At the scheme level, the strategy is quite tightly defined with clear concentration, style & fundamental benchmarks that are being followed. Strategy bias towards large-cap, but there is a reasonably high concentration in mid-caps (reflected in the core skills of Sundaram AMC). The strategy has matured successfully by investing in businesses with a large and mid-cap bias, capitalizing on their secular growth opportunities.
Fund Performance
The fund has outperformed peers in the last 5 year trailing returns. In terms of longer-term annual performance, performance consistency has been mixed, with the fund having outperformed & underperformed the bechmark roughly in half the 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 (Jul 25). 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 Strategy
Sector-Agnostic, High-Conviction Compounding Approach
Sundaram SISOP follows a sector-agnostic investment strategy focused on identifying long-term compounding businesses and constructing a concentrated portfolio of approximately 15 stocks. The scheme seeks capital appreciation across market cycles by backing companies with scalable business models, strong financial discipline, and credible management teams, allowing earnings growth to drive returns rather than tactical sector positioning.
3Q Stock Selection Framework
- Quality of Business: Emphasis on scalable and self-sustaining business models with clear differentiation and durable competitive advantages.
- Quality of Financials: Focus on companies with the potential to double earnings over 4–5 years, minimum ROIC of 15%, operating cash flow to EBITDA above 50%, and conservative balance sheets with debt-to-equity below 0.5x.
- Quality of Management: Assessment of management track record, long-term vision, capital allocation discipline, ability to identify and execute profitable growth opportunities, and adherence to sound corporate governance practices.
PMS Background
Sundaram Alternates PMS is part of Sundaram AMC, a mid-sized mutual fund house with a long operating history, having commenced operations in 1996. While smaller in scale compared to large peers such as ICICI, Birla, or Axis, Sundaram has historically built a strong reputation in small and mid-cap investing, particularly with deep familiarity and access to South Indian businesses. This legacy of bottom-up stock selection provides a credible foundation for its alternatives and PMS platform. However, the PMS exhibits several characteristics typical of AMC-driven PMS offerings, including limited structural separation from the broader AMC, relatively higher investment team churn, and constrained alignment due to the absence of meaningful equity ownership by key decision-makers. The current CIO, Madanagopal, has a relatively short tenure of around two years, reinforcing concerns around continuity, long-term accountability, and depth of skin-in-the-game at the PMS level.
PMS Investment Philosophy
Sundaram Alternates PMS does not articulate a sharply defined or differentiated investment philosophy at the PMS level. Instead, its approach appears to be an extension of the parent AMC’s long-standing strength in identifying opportunities within the small and mid-cap segment. The platform leverages Sundaram’s regional networks and on-ground familiarity, particularly in South India, which has historically enabled access to management teams and niche businesses that are less institutionally crowded.
Suitable For
Investors seeking exposure to a long-established investment institution with demonstrated experience in small and mid-cap stock selection, and who are comfortable with an AMC-led PMS structure despite potential limitations around team stability, alignment, and philosophy clarity.
Trailing Performance
| 1yr | 3yr | 5yr | Since Inception | |
|---|---|---|---|---|
| Sundaram Alternates SISOP | 17.1 | 20.7 | 19.3 | 18.3 |
| S&P BSE 500 | 4.9 | 14.6 | 17.2 | 13.3 |
| Alpha over Broad Mkt BM | 12.2 | 6.1 | 2.1 | 5 |
Performance as of: 30-Nov-25 | Inception Date: 01-Feb-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.
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