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Finance

Sunderam Alternates

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SUNDARAM ALTERNATES

Sundaram Alternates (SA) specializes in PMS and AIF services, managing the wealth of family offices, high net-worth individuals, and corporate clients. Their portfolios offer various alternatives for long-term wealth creation and are designed to meet specific investment objectives. Sundaram Alternates follows modern industry standards, robust operating models, data-backed research, and transparency to give their investors' money the advantage it requires.

The company currently manages discretionary portfolios and alternative investment funds in the equity and private credit space, with a committed approach and focus on research-driven wealth building. Sundaram Alternates oversees Category II and Category III AIFs in the AIF market. Under Category III AIFs, the brand offers three equity products: Acorn, a mid- and small-cap fund; Sundaram India Premier Fund (SIPF), a sector-focused fund that invests in the expanding consumer sector; and Atlas I and Atlas II, open-ended multi-cap funds. Under Category II, the company manages three high yield secured debt funds (High Yield Secured Debt Fund I, High Yield Secured Debt Fund II, and High Yield Secured Real Estate Fund III) and one fund that invests in secured corporate credit (Emerging Corporate Credit Opportunities Fund I).

Mr. Madanagopal Ramu – Head - Equity, Fund Manager

Mr. Madanagopal Ramu, the Head of Equities and Fund Manager, brings more than 18 years of expertise in the Indian Financial Markets. He currently oversees Assets Under Management (AUM) of around Rs. 3400 crores, with more than 8 years of fund management experience. He is responsible for managing the Sundaram Emerging Leadership Fund (S.E.L.F.), Voyager PMS, and Sundaram India Secular Opportunities Portfolio (SISOP) strategies. Madanagopal started as an equity analyst and joined Sundaram AMC in 2010. He holds a management degree from Bharathidasan Institute of Management, Trichy, and is a certified cost accountant.

Mr. Prashant Kutty – Assistant Fund Manager, PMS & AIF Cat III

Mr. Prashant Kutty, the Assistant Fund Manager for Category III Alternative Investment Funds (AIF) and Portfolio Management Services (PMS), has more than 15 years of expertise in equities research. He has been actively monitoring the consumption sector for over ten years and has a knack for spotting mid- and small-cap firms. Prashant is knowledgeable in valuations and financial modelling. Prior to joining Sundaram Mutual Fund, he worked with prestigious capital market firms. Prashant holds a management degree from Mumbai University's Institute of Management Studies and Research.

SUNDARAM ALTERNATES' INVESTMENT PROCESS AND PHILOSOPHY

The first step in Sundaram Alternates' investment process is the formation of promising wealth-building concepts that align with the overall investment aim of the Fund. The company combines macroeconomic, geopolitical, and industry-level research to generate ideas holistically and identify sub-themes within the main theme. The next stage involves creating the initial investing universe of companies that match the topic requirements using appropriate filtering criteria. The final stage is a thorough evaluation of each company in the investment universe, classifying them into different sectors and industries.

At the sector/industry level, Sundaram Alternates focuses on the main demand drivers, industry products and services, competitive environment, regulatory implications, technology disruptions, and other potential external developments. This analysis generates a thorough output on the relative attractiveness of each industry within the chosen investment themes. The analysis is model-driven and conducted at the level of the portfolio company, including financial analysis, stress-testing profitability and leverage, and ensuring compliance with corporate governance standards.

Investment Objective

To make investments throughout the cap curve in competitively priced stocks to pursue long-term capital growth.

Target Investors

Created for long-term investors seeking profits through investments in a combination of cyclical opportunities and good fundamental companies.

Voyager at a Glance

Diversified target portfolio with 15-25 stocks Flexible cap curve allocation Identify long-term trends and invest early in them Long performance track record of 12+ years Leveraging experience to play across market cycles

Two Buckets of Stocks

Structural Stories - Ensure stable returns on the portfolio in the long run. Cyclical & Turnaround Stocks - Offer investors the opportunity to generate more alpha depending on the market and business cycles.

4x4 Wealth Multiplier Themes

Financial Inclusiveness - India will handle the issue of financial inclusion over the coming ten years with the aid of digitalization, big data, and abundant finance. Opportunities to invest include lending segments like affordable housing, MSME, vehicle finance, and unsecured loans. Consumption Czars - A multi-decade increase in organized retail and discretionary expenditure will be driven by increasing per capita income, an increase in the number of affluent households, and a sizable GenZ cohort. Opportunities to invest include the automotive, dining, travel, entertainment, health, education, and consumer electronics industries. Manufacturing Maestros - The comeback of the Indian manufacturing sector will be known in the coming decade. Opportunities to invest include electronics, chemicals, automobiles, engineered goods, railways, and defence spending. Phygital Blue Chips - Government programs like UPI, Big Data, ONDC, and Account Aggregators are likely to redefine service costs. Opportunities to invest include traditional businesses adopting technology and tech firms with reliable unit economics.

The interview with Mr. Madanagopal Ramu, Head - Equity, Fund Manager, provides insights into the Sundaram-Voyager strategy and its investment approach.

INTERVIEW WITH MR. MADANAGOPAL RAMU, HEAD - EQUITY, FUND MANAGER

As the Sundaram-Voyager strategy is a combination of core and satellite approaches, are there any current market trends or macroeconomic conditions that influence the investment decisions within the strategy?

Yes, the strategy's approach is to be opportunistic and add value to possibilities that present themselves as a result of market and company cycles. Depending on opportunities, the portfolio's value mix might reach 60%. In general, we seek three value opportunities:

Significant declines in mid- and small-cap indices relative to large-cap indices Opportunities for a turnaround brought on by unique circumstances like a change in management or promoters, an M&A, etc. Tough business cycles during which strong enterprises can be found at a bargain, and the earnings upgrading cycle begins.