Sundaram Alternates Voyagers
Sundaram Alternates PMS | Equity | | PMSIME's View on Sundaram Alternates Voyagers
Strategy
Investment Fund
Sundaram Voyager 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
Sundaram Voyager has aged well with its multi-cap, core and satellite strategy. The investment philosophy and strategy are well-defined around concentration, market-cap allocation, style, fundamentals and key themes to invest in.
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 (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
Voyager Portfolio is a multi-cap, high-conviction strategy structured as a concentrated portfolio of approximately 20 stocks, targeting long-term capital appreciation through investments across market capitalisations at reasonable valuations. The strategy follows a clearly defined Core and Satellite framework, balancing structural compounders with selective cyclical and turnaround opportunities, while maintaining flexibility across market cycles.
Core and Satellite Portfolio Construction
- Core Portfolio (~75%): Focuses on asset-light businesses with established operating track records, efficient capital allocation, and scalable growth opportunities, with an emphasis on long-duration structural growth stories.
- Satellite Portfolio (~25%): Allocated to higher-growth opportunities, including cyclical and turnaround situations, aimed at capturing incremental upside from changing business or sector dynamics.
Indicative Market Capitalisation Mix: ~40% large cap, ~40% mid cap, and ~20% small cap.
Investment Philosophy
3Q Stock Selection Framework
The strategy applies a structured “3Q” framework to identify investment opportunities, focusing on business quality, financial strength, and management capability.
- Business Quality: Preference for businesses that generate strong cash returns and offer reinvestment opportunities to sustain growth.
- Financial Quality: Emphasis on the ability to double earnings over a 3–5 year period, minimum ROIC of 15%, strong cash conversion with operating cash flow exceeding 50% of EBITDA, and prudent leverage with debt-to-equity below 0.5x.
- Promoters and Management: Evaluation of past execution track record, clarity of long-term vision, capital allocation discipline, promoter shareholding and pledging levels, ESOP structures, and potential risks from contingent liabilities or related-party transactions.
Identified Investment Themes
- Consumer Discretionary: Driven by rising disposable incomes, an expanding middle-income population, and favorable demographic trends.
- Financial Services: Benefiting from increasing financial inclusion and market share gains by private sector players.
- Make in India: Supported by global China de-risking trends and labor cost advantages across manufacturing sectors.
- Digital Economy: Underpinned by a large and growing internet user base, increasing digital penetration, and demographic tailwinds.
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 Voyagers | 12.3 | 19 | 20.2 | 14.5 |
| S&P BSE 500 | 4.9 | 14.6 | 17.2 | 16 |
| Alpha over Broad Mkt BM | 7.4 | 4.4 | 3 | -1.5 |
Performance as of: 30-Nov-25 | Inception Date: 01-Oct-11 | 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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