Alchemy Capital Management Private Ltd, a Portfolio Management Services provider, has announced the launch of a new CAT-III AIF scheme, ‘Alchemy Emerging Leaders of Tomorrow’, with a tenure of four years.

This new fund targets a corpus of ₹500 crore and hopes to enable investors capitalise on the immense growth potential of small- and mid-cap companies.

 “India is on the cusp of a solid economic recovery led by manufacturing and digital-led businesses. Picking winners from the small- and mid-cap space is both challenging and exciting, and we want to give investors and family offices the platform to bet on the next set of leaders across a wide range of sectors,” Hiren Ved, Co-Founder, Alchemy Capital Management, told BusinessLine.

Sector-agnostic portfolio

He said that the fund will have a portfolio of 20-25 stocks that will be sector-agnostic and will focus largely on small- and mid-cap funds, about 65 per cent allocation. The portfolio will also include investments in large-caps and about 10 per cent in IPO opportunities or any other instruments permitted by applicable laws. 

Ved will manage Alchemy Emerging Leaders of Tomorrow together with Mythili Balakrishnan.

“We believe the small and mid-sized businesses have undergone multiple stressors over the past few years, but have emerged stronger and are well placed to take advantage of the current demand environment,” Balakrishnan said.

Fund strategy

The fund’s strategy is to generate long-term capital appreciation by identifying high-quality companies with strong growth prospects benefiting from themes such as India’s rising discretionary spending, digitalisation, global outsourcing, import substitution, and improving manufacturing competitiveness and investment, with a minimum investment of ₹1 crore.

Alchemy Capital Management would be leveraging its experience from previous AIF schemes: Alchemy Leaders of Tomorrow, a close-ended fund, which matured on November 29, 2021 and had given a CAGR of 22.1 per cent since inception (November 29, 2018) vs its benchmark S&P BSE 500 of 17.4 per cent; and Alchemy Leaders of Tomorrow (an open-ended scheme), that has given one-year return of 14.4 per cent vs its benchmark S&P BSE 500 of 5.4 per cent and a CAGR of 13.1 per cent since inception (January 3, 2018) vs 11.1 per cent benchmark.