Sundaram Alternative Opportunities Fund - Nanocap Series I

A Close Ended - Category III Alternative Investment Fund

Introduction

Sundaram Alternative Opportunities Fund - Nano Cap Series I is a close-ended Category III Alternative Investment Fund (AIF) which aims to generate absolute total returns by investing in stocks with a market cap of less than Rs 1000 crores. Nano Cap space offers the high potential for wealth creation over the long term as it is the under invested, under researched segment between venture capital firms and small-caps.Sundaram Asset Management Co. Ltd. is the Investment Manager.

AIF

Portfolio Construction

  • Bottom up approach to portfolio construction
  • No of stocks to be between 15 and 25 averaging around 20
  • Sector agnostic
  • Buy and Hold approach
  • Disciplined profit booking if single stock exposure exceeds 20% of portfolio
  • Stock Selection on fundamentals like: sound business model with visible growth and profits, management’s focus on creating shareholder wealth, strong financials – efficient capital allocation, high return ratios.

Key Features

  • Access to Niche Investment and Research Capabilities: The fund will provide access to extensive research, stock ideas, specialized knowledge and vast experience of the Investment Manager.
  • Active Alpha Generation: The fund will generate alpha by investing in a concentrated portfolio of 15-25 high conviction stocks which are under researched and under invested.
  • Flexibility of AIF Structure Ideal for Nano Cap Investments: The close-ended nature and the limited liquidity requirements of the AIF structure, allows the Investment Manager to follow an absolute return approach instead of a relative return without short term performance pressure. This proves ideal for nano cap stocks as investment in them require patience, to witness alpha and a discplined exit.
  • Early Gate to Book Profits: The Fund offers voluntary wind down and distribution if 25% CAGR (pretax net of fees) is achieved at end of 3 years.
  • Long Term Orientation: No new investments other than existing companies post 3 years of final closing.
AIF

Fund Manager Profile

Mr.S.Bharath is the fund manager of Sundaram PMS and Sundaram Alternative Investments Fund. He currently manages an AUM of 1400 crores of Sundaram PMS. He joined Sundaram mutual fund in August 2004 as research analyst, covering oil & gas, metals and associated midcaps. He moved into active fund management of hybrid funds in 2012 and started managing open-end equity schemes since Jan 2013. The funds he previously managed includes Sundaram Infrastructure Advantage Fund, Sundaram Top 100, Sundaram Rural India Fund and Sundaram World Brand Fund apart from co-managing Sundaram Value Fund Series - II. Apart from the funds he managed, he also was the dedicated fund manager for investments in overseas securities since November 2009. Prior to joining Sundaram Mutual, Mr. S. Bharath worked with Navia Markets Ltd for 2 yrs as research analyst.He is a certified FRM, a Cost Accountant and a Masters of Business Administration from Thiagarajar School of Management, Madurai.

Disclaimer

The document is for informational purposes only and should not be regarded as an offer to sell or as a solicitation of an offer to buy the securities or products other investments or services mentioned in it. The recipient should note and understand that the information provided above may not contain all the material aspects relevant for making an investment decision. We do not represent that any information, including any third party information, is accurate or complete and it should not be relied upon without proper investigation on the part of the Client/s. This document is not a final fund document from the Investment Manager and is subject to change. The actual Private Placement Memorandum document from the Investment Manager will take precedence over this document of Sundaram Alternative Investment Manager (SAIM).

Investments in securities/equity related instruments are subject to market risk. These risks could be security specific or market specific and arising from company, industry, political, economic (both domestic and global), etc. factors. Past performance of Sundaram Alternative Investment Manager (SAIM) or any of its director/s or principal officer/s does not indicate the future performance of any current or future fund or products advised or managed or services provided by SAIM. There is no assurance or guarantee that the objectives of any fund or products advised or managed by SAIM or services provided by SAM will be achieved. SAIM or any of its director/s or principal officer/employees/associates does not assure/give guarantee for any return on the funds/securities given by the client.

The decision of the Investment Manager may not always be profitable, as such decisions are based on the prevailing market conditions and the understanding of the Investment Manager. Actual market movements may vary from the anticipated trends. This information is subject to change without any prior notice. SAIM reserves the right to make modifications and alterations to this statement as may be required from time to time. Neither SAIM, not its Directors or Associates or representatives shall be liable for any damages whether direct or indirect, incidental, punitive special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. The contents of this document should not be treated as advice relating to legal or taxation matters.