Alchemy High Growth Select Stock Strategy: Investment Philosophy, Portfolio Construction & Performance
Alchemy High Growth Select Stock Strategy
Alchemy High Growth Select Stock Strategy (AHGSS) is a concentrated equity investment strategy focused on generating long-term capital appreciation through high-conviction investing across market capitalizations.
The strategy combines:
- top-down research
- bottom-up stock selection
- concentrated portfolio construction
- long-term investing discipline
The portfolio focuses on identifying businesses with:
- sustainable growth
- strong management quality
- scalable business models
- competitive advantages
Alchemy High Growth Select Stock
Investment Objective
To generate long-term returns by investing in:
- equities
- equity-related instruments
- companies across all market capitalizations
High Conviction Investment Strategy
The strategy combines:
- top-down investing
- bottom-up stock picking
- deep business understanding
- long-term investing discipline
The investment framework focuses on identifying:
- long-term business winners
- sustainable growth companies
- scalable businesses
- quality management teams
Concentrated Portfolio Approach
The strategy believes that:
- diversification is important
- over-diversification may dilute returns
A concentrated portfolio enables:
- greater focus on individual businesses
- higher conviction investing
- active portfolio management
Strategy for UHNI & Family Offices
The strategy is designed for:
- Ultra High Net Worth Individuals (UHNI)
- family offices
- large allocators
The objective is to provide:
- differentiated investing approaches
- concentrated equity exposure
- long-term wealth creation opportunities
Alchemy High Growth Select Stock (AHGSS) – Product Highlights
Investment Philosophy
The philosophy is based on the belief that:
- India is a high-growth economy
- India has a strong entrepreneurial ecosystem
The strategy aims to identify and invest in growth companies through:
- top-down research
- bottom-up fundamental analysis
The portfolio generally consists of:
- 8–14 stocks across sectors
The portfolio may be customized based on:
- investor requirements
- investment understanding
Investment Strategy
Invest in companies across market capitalizations that:
- have high growth potential
- can deliver long-term capital appreciation
Fund Management
- Fund Manager: Hiren Ved
Securities & Investment Horizon
Type of Securities
- Equity
Investment Horizon
- 3 to 5 Years
Risk Profile
- High Risk
Portfolio Allocation
- Up to 100% allocation in equity
- Cash portion may be invested in:
- liquid funds
- debt securities
Market Capitalization Allocation
Since the portfolio is concentrated:
- focus remains on stock selection
- market cap allocation is secondary
Investment Framework
1. Relevant Universe
A relevant universe of approximately 500 companies is identified based on:
- market capitalization (preferably above INR 1,000 Crores)
- governance standards
- business attractiveness
- ROE profile
- qualitative filters
2. Investible Universe
The investible universe is created by evaluating:
- revenue growth
- EBITDA growth
- cash flow conversion
- core ROE
- management quality
- governance standards
- competitive positioning
Valuation Analysis
Comprehensive valuation methods may include:
- P/E
- P/B
- EV/EBITDA
- DCF valuation
3. Portfolio Construction
The Portfolio Manager constructs portfolios from the investible universe based on:
- investment conviction
- valuation comfort
- portfolio positioning
Benchmark
- S&P BSE 500 TRI
Basis for Benchmark Selection
As per APMI Circular APMI/2022-23/02 dated March 23, 2023.
Alchemy High Growth Select Stock – April 2024
Key Highlights
- Group AUM exceeds USD 1.1 billion
- INR 1 crore invested in December 2008 could have grown to over INR 17.1 crores
- Outperformed benchmark in 10 out of 16 calendar years
- Generated annualized alpha of 372 bps (INR returns)
Alchemy High Growth Select Stock (AHGSS) – Performance Highlights
Portfolio Composition & Analysis
Alchemy Capital Management
Alchemy Capital Management is a SEBI-registered Portfolio Manager based in Mumbai providing bespoke Portfolio Management Services in India.
Key Highlights of Alchemy Capital Management
- Operating since 2002
- Long-term investing approach
- Strong bottom-up stock picking capability
- Experienced investment professionals
- Strong compliance and risk management framework
- Managing/advising AUM of USD 1.1 billion
- Trusted by:
- institutional investors
- sovereign funds
- ultra HNIs
- family offices
Our Investment Philosophy
Long-Term Investing
The investment philosophy focuses on:
- consistent long-term returns
- superior absolute performance
- investing across market cycles
The strategy invests in:
- growth-oriented companies
- scalable businesses
- quality management teams
Business Selection Criteria
Preferred businesses typically have:
- large addressable opportunities
- competitive advantages
- scalable business models
- strong ROCE profiles
Management Evaluation
Management quality is considered critical.
The framework evaluates:
- business aggression
- governance standards
- capital allocation discipline
- alignment with business outcomes
Tactical Investment Opportunities
While growth companies form the portfolio core, the strategy may also invest in:
- deep value opportunities
- special situations
- cyclical opportunities
Intervention: Risk Management
Firm Level Risk Management
- Performance pattern analysis
- Dedicated pre-trade and post-trade checks
- Internal reviews
- Compliance and legal monitoring
- Business risk management by CEO
Portfolio Level Risk Management
- Daily monitoring by operations team
- Monthly benchmark comparison reviews
- CIO performance reviews with fund managers
- Contribution analysis every month
- Portfolio positioning reviews and action plans
Security Level Risk Management
- Sectoral exposure limits
- Individual stock exposure limits
- Ownership monitoring at strategy level
- Position limit monitoring by operations team
Intervention: Investment Committee
Committee Members
- CEO
- CIO
- COO
- Fund Managers
- Business Heads
- Head of Research
Investment Committee Responsibilities
The committee focuses on:
- macro views
- performance tracking
- contribution analysis
- exception reporting
- priority actions
Macro View Analysis
The investment team reviews:
- macroeconomic changes
- microeconomic variables
- expected future developments
Fund Performance Review
Each fund manager presents:
- portfolio positioning
- impact of macro and micro changes
- underperforming positions
- trigger events
- corrective actions
Risk Monitoring
An in-depth contribution analysis is conducted to review:
- outperformers
- underperformers
- portfolio positioning
- required action plans
Frequently Asked Questions (FAQs)
What is Alchemy High Growth Select Stock Strategy?
Alchemy High Growth Select Stock Strategy is a concentrated equity investment strategy focused on long-term capital appreciation through high-conviction stock selection.
What type of companies does the strategy invest in?
The strategy invests in growth-oriented companies across market capitalizations with:
- scalable business models
- strong management
- sustainable growth potential
How concentrated is the portfolio?
The portfolio generally consists of approximately 8–14 stocks across sectors.
What benchmark does the strategy use?
The benchmark used is the S&P BSE 500 TRI.
What is the investment horizon?
The recommended investment horizon is 3–5 years.
Who manages the strategy?
The strategy is managed by Hiren Ved.
Final Thoughts
Alchemy High Growth Select Stock Strategy combines:
- concentrated investing
- high-conviction stock selection
- bottom-up research
- long-term investing
- disciplined portfolio construction
The strategy focuses on generating long-term wealth creation through scalable businesses and active portfolio management.
