Alchemy Long Term Ventures Fund: A Deep Dive for HNI & UHNI Investors

Executive Summary

The Alchemy Long Term Ventures Fund – Series 3 is designed for sophisticated investors seeking long-term capital appreciation through a differentiated blend of listed small-cap equities, IPO opportunities, and selective unlisted/pre-IPO investments. Structured as a Category III Alternative Investment Fund (AIF), the strategy reflects a rare convergence of public market discipline and private market patience—an approach particularly relevant in India’s current multi-decade growth cycle.

Managed by Alchemy Capital Management, a firm with over two decades of institutional investing experience, the fund is positioned to capture structural themes that are often under-represented or inefficiently priced in traditional portfolios.

Investment Thesis: Public Markets with a Private Equity Lens

At its core, the Alchemy Long Term Ventures Fund is built on a “Growth at a Reasonable Price” (GARP) philosophy, executed with private-equity-style due diligence and long holding periods. Unlike conventional long-only equity strategies that are constrained by liquidity or benchmark orientation, this fund deliberately embraces complexity, illiquidity, and early-cycle opportunities.

Why This Matters for HNI Portfolios

For HNIs and family offices, the biggest long-term risk is not volatility—it is structural under-exposure to tomorrow’s winners. Many transformative businesses generate disproportionate value before they become large-cap index constituents. This fund seeks to bridge that gap by:

• Investing in listed small-cap companies before institutional crowding
• Participating in anchor book and IPO allocations
• Allocating up to 35% in unlisted / pre-IPO companies, where valuation inefficiencies are higher

This hybrid structure allows investors to benefit from asymmetric upside, while still retaining the transparency and governance discipline of public markets.

Structural Growth Themes: Riding India’s Next 20 Years

The fund is explicitly aligned with India’s long-term economic transformation. While sector allocation remains flexible, the investment universe is informed by powerful, multi-year themes including:

• Data Centres & AI Infrastructure – India’s data capacity per user remains significantly below global peers, implying sustained capex and platform growth.
• Defence & Indigenous Manufacturing – Rising domestic procurement and policy-led indigenisation create durable private-sector opportunities.
• Green Mobility & Energy Transition – EV ecosystems, battery value chains, and renewable infrastructure are entering an exponential phase.
• Semiconductors & Electronics – Import substitution and global supply chain realignment favour domestic champions.
• Premiumisation & Financialisation – India’s affluent consumer base and capital market participation are expanding faster than GDP.
• Healthcare & Biotechnology – Under-penetration, policy support, and global outsourcing tailwinds support scalable growth

Crucially, the fund does not invest thematically in a top-down manner. Each investment must pass rigorous bottom-up filters on unit economics, capital efficiency, management quality, and scalability.

Portfolio Construction & Investment Process

Multi-Layered Research Framework

Alchemy’s investment process integrates idea generation, forensic research, valuation discipline, and active monitoring:

1. Idea Sourcing
   Proprietary networks across entrepreneurs, PE/VC funds, intermediaries, and listed-company managements.
2. Deep Due Diligence
   Management meetings, channel checks, independent industry validation, and detailed financial modelling.
3. Portfolio Construction
   No mechanical sector caps; position sizing driven by conviction, liquidity, and downside risk.
4. Ongoing Review & Exit Discipline
   Exits triggered by valuation saturation, thesis change, IPO listing, secondary sale, or strategic M&A

This approach closely mirrors institutional private equity governance, applied within a listed/unlisted hybrid structure.

Fund Structure & Key Terms (Investor-Relevant)

Fund Term

• Base Term: 4 years from First Closing
• Extension: Up to 1 additional year with approval of 2/3rd of investors
  This structure aligns capital with business growth cycles, rather than quarterly performance pressures .

Minimum Investment

• ₹1 Crore minimum capital commitment
  This threshold ensures a sophisticated investor base, aligned with the fund’s high-conviction, high-risk mandate.

Capital Commitment & Drawdown Structure

Investment into the Alchemy Long Term Ventures Fund follows a staggered drawdown model, aligned with portfolio deployment.

Capital is not taken upfront. Instead, the committed amount is drawn in four tranches of 25% each, spread over approximately 10-12 months from the first closing.

What this means for investors:

• Capital is called progressively, in line with investment opportunities
• Reduces idle cash drag
• Improves capital efficiency and IRR potential
• Provides better visibility for cash-flow planning

This structure is particularly well-suited for HNI and family office investors, allowing commitments to be planned without blocking liquidity on day one.

Liquidity & Redemption

• Closed-ended structure
• No interim redemptions
• Exit only at fund maturity or liquidation

This is suitable for investors with long-term surplus capital, not short-term liquidity needs.

Fees: Alignment Over Optics

The fund offers two fee structures, allowing investors to choose between lower fixed fees or higher performance alignment.

Option I: Management Fee Model

• 2.50% p.a. for ₹1–3 Cr
• 2.25% p.a. for ₹3–5 Cr
• 2.00% p.a. for ₹5 Cr+

Option II: Performance Fee Model

• 20% performance fee over a 10% XIRR hurdle
• Lower base management fee
• No performance fee if hurdle is not achieved

From an allocator’s standpoint, Option II is particularly attractive for investors who believe in the manager’s ability to generate alpha beyond public market benchmarks .

Risk Profile: Who Should (and Should Not) Invest

Suitable For

• HNIs/UHNIs with 5–10+ year investment horizons
• Investors seeking listed + pre-IPO exposure in one vehicle
• Portfolios already diversified across traditional equity and fixed income
• Family offices aiming for next-generation wealth creation

Not Suitable For

• Investors requiring periodic liquidity
• Low risk tolerance investors
• Portfolios already over-exposed to small-cap or illiquid assets

The fund is explicitly classified as High Risk, and investors must be comfortable with interim volatility and valuation opacity in unlisted holdings.

Track Record & Strategy Credibility

While Series 3 is a fresh issuance, Alchemy has showcased performance from similar existing strategies under the same investment philosophy, with ~20%+ CAGR since inception (post-fees), though past performance is not indicative of future results .

More importantly, the credibility stems from:

• 30+ years of leadership experience
• Stable investment team
• Institutional-quality research infrastructure
• Demonstrated ability to invest across market cycles

Frequently Asked Questions

Is this fund more like private equity or public equity?

It sits in between—public equity liquidity with private equity thinking, especially in unlisted and pre-IPO allocations.

How is this different from PMS strategies?

Unlike PMS, this fund can lock capital, invest meaningfully in unlisted securities, and avoid forced liquidity decisions.

What drives returns—sector calls or stock selection?

Primarily bottom-up stock selection, with sector themes acting as tailwinds, not constraints.

How are unlisted investments exited?

Through IPOs, secondary sales, or strategic M&A transactions, depending on market conditions.

Is currency or global exposure involved?

The fund primarily focuses on India-centric opportunities, benefiting from domestic growth and global outsourcing.

How should this fit into a broader portfolio?

Typically as a satellite allocation (10–20%) within an overall equity or alternatives bucket for HNIs.

Final Perspective: An Allocator’s View

The Alchemy Long Term Ventures Fund is not a product for everyone—and that is precisely its strength. In a world of increasingly commoditised equity products, it offers true differentiation: patient capital, access to under-researched opportunities, and alignment with India’s most powerful long-term growth drivers.

For HNIs and family offices willing to trade liquidity for structural alpha, this fund represents a compelling long-term allocation, especially as part of a thoughtfully constructed alternatives portfolio.

As always, investors should review the full Private Placement Memorandum and consult independent advisors before committing capital .

Download the strategy presentation and connect with our team for a personalised portfolio review.