ETMarkets AIF Talk | Next-generation entrepreneurs will create India's biggest wealth opportunities: Hiren Ved

India's next wave of wealth creation may not come solely from established listed companies but increasingly from a new generation of entrepreneurs building businesses in strategic sectors such as artificial intelligence (AI), semiconductors, defence, healthcare, data centres and green energy, believes Hiren Ved, Director and CIO at Alchemy Capital Management.

In an interaction with Kshitij Anand of ETMarkets, Ved said India's evolving innovation ecosystem is creating a fertile ground for founders who are leveraging advanced technologies to build globally competitive businesses with strong growth potential and attractive economics.

He believes investors with a long-term horizon should look beyond conventional equity strategies and consider opportunities across listed and unlisted markets to capture this emerging wealth creation cycle.

Ved also shared his outlook on small-cap investing, market volatility, IPO and pre-IPO opportunities, the role of Category III AIFs in HNI portfolios, and why India’s AI and data centre ecosystem could emerge as one of the country's most compelling long-term investment themes. Edited Excerpts –

Q) Thanks for taking the time out. Please take us through the performance of the fund from short- & long-term perspective.
A) The investment approach has continued to demonstrate balanced performance despite a volatile market environment.


Alchemy Long Term Ventures Fund has delivered an absolute return of 17.0% in CY2026 year-to-date basis and a CAGR of 22.6% since its inception on 1 September 2023, reflecting the fund's investment philosophy to identify the businesses with strong earnings momentum, robust balance sheets, and favourable sectoral tailwinds.

Alchemy Long Term Ventures Fund, Series 2 has also delivered a CAGR of 14.8% since its launch on 1 September 2025, reinforcing the consistency of our investment approach across market cycles.

Data as on 30 June 2026.

(Returns are net of Post Fees, Expenses and Taxes. Consolidated Returns are calculated using unitization method. The Consolidated Returns may vary with investors’ returns depending on the class/series investor have subscribed into. |Past performance is not indicative of the future performance. Returns less than 1 Year: Absolute, greater than 1 Year: CAGR| Performance related information provided herein is not verified by SEBI.)

Q) The fund primarily focuses on small-cap opportunities while retaining the flexibility to invest up to 35% in unlisted securities. How do you balance the higher growth potential of these segments with liquidity and valuation risks?
A) Alchemy Long Term Ventures Fund, Series 3 (Category III AIF) is designed for sophisticated investors who have a long-term outlook and understand the risks associated with such a strategy.

Clearly, this is for investors that have an appetite for risk but are looking for differentiated exposure beyond traditional listed equity strategies. The unlisted sleeve is to take advantage of dynamism and entrepreneurial energy of entrepreneurs building the next generation of high growth businesses in strategic growth sectors.

We aim to blend that with similar companies operating in these sectors in the listed space. The ability to straddle both listed and private opportunities gives us significant flexibility to deploy capital. Restricting unlisted to up to 35% of the fund, allows us to strike a balance between liquidity and tenure of investments which is between 4-5 years.

We are reasonably sensitive about entry valuations. On the listed side we use market volatility to our advantage as we always have liquidity on tap.

Q) The strategy identifies themes such as data centres & AI, defence, green mobility, semiconductors, manufacturing and green energy as key opportunities. Which of these themes do you believe could create the most wealth over the next 4-5 years, and why?
A) All the above sectors have tremendous potential, in my view. Our idea is to identify companies and founders in the value chain that exhibit both - great growth opportunity combined with attractive business economics, in terms of profitability and economic returns.

One without the other does not cut it with the objectives of the strategy. It is our firm belief that some of the most innovative high growth companies may be built by the next generation of entrepreneurs who are unconstrained by previous profit pools and are likely to embrace advanced technologies and practices faster than incumbents.

The opportunity set for these companies arises from building certain foundational capabilities in defence, aerospace, space, semiconductors, healthcare, biotech, AI, data centre infrastructure, green energy and green mobility to name a few.

Q) The existing Alchemy Long Term Ventures Fund has delivered a 22.6% post-tax CAGR since inception, with significant exposure to industrials and IT. What have been the key drivers of this performance, and can the same investment framework be replicated in Alchemy Long Term Ventures Fund, Series 3?
A) Our exposure in Alchemy Long Term Ventures Fund has been towards manufacturing and industrial companies spanning several strategic sectors. In IT, our exposure has not been to traditional services companies but in companies that leverage specialised skill sets in silicon design, space communication, devices and transportation sectors.

We have also seen encouraging progress from our investments in healthcare companies bringing original research molecules to commercial stage. Yes, we intend to carry the same investment philosophy in Alchemy Long Term Ventures Fund, Series 3 as well.

The portfolio performance was supported by a combination of earnings growth and valuation re-rating of our portfolio companies.

Q) The strategy can invest across listed equities, IPO anchor books, pre-IPO opportunities, and unlisted securities. In the current market environment, where are you finding the most attractive risk-reward opportunities?
A) Market volatility always gives us many attractive entry points. March 2026 was one such occasion. In anchor books and unlisted we are extremely selective in our approach. We continue to see a healthy interest from IPO-bound companies to be part of their cap table, a trend we attribute to our long-standing presence and historical track record.

In unlisted, the quality of the founders and entry valuations matter the most, so we are always on a lookout for that.

Q) Given the minimum investment of Rs 1 crore and the fund's four-year tenure, what role should a Category III AIF such as this play in an HNI investor's overall portfolio?
A) Alchemy Long Term Ventures Fund, Series 3 is a high-risk strategy, and investors should consider such investments in the context of their investment objectives, liquidity needs and risk tolerance. Investors may consider making investments of such sums with a horizon of over the next 5-10 years. This would generally sit between small/midcap equity and private equity.

Q) India's data centre capacity per 1,000 internet users remains significantly below China and the US, according to the fact sheet. Where do you see the biggest investment opportunities emerging as India builds its AI and data centre infrastructure?
A) I think the initial opportunities are at an infrastructure layer and its entire ecosystem – from designing, building to equipment that go into a data centre.

However, we are now seeing many interesting opportunities even on the application layer, where companies are using AI models and capabilities to deliver services to enterprise customers and consumers. We have made select investments in companies leveraging AI at the application layer.

Disclaimer: Past performance is not indicative of the future performance. The sectors herein are solely for information purposes and may or may not form part of the Fund's portfolio at the time of making investments.

Alchemy Long Term Ventures Fund, Series 3 is one of the schemes of Alchemy Alternative Investment Trust, registered with Securities and Exchange Board of India (SEBI) as a Category III – Alternative Investment Fund, vide registration number IN/AIF3/17-18/0381. Alchemy Capital Management is registered with the Securities and Exchange Board of India (SEBI) as a Portfolio Manager and appointed as the Investment Manager of the Trust and the Fund.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)