Anand Radhakrishnan’s first specialised investment fund will hold 25 to 40 companies outside India’s biggest listed firms and can short stocks, favouring selectivity as mid- and small-cap returns become less broad-based.
Anand Radhakrishnan is making a pointed bet that the next phase of India’s equity market will reward selectivity over breadth. Sundaram Mutual’s first specialised investment fund, the Select Equity Ex-Top 100 Long-Short Fund, will hold a concentrated portfolio of 25 to 40 companies outside the country’s 100 largest listed firms and may use derivatives to take short positions, giving the manager more room to hedge mispriced stocks than a conventional long-only fund. According to Value Research Online and Sundaram’s product material, the fund is designed for investors comfortable with a narrower, more active strategy than the typical diversified mid-cap or small-cap portfolio.
Radhakrishnan’s argument is that years of gains across the middle and lower end of the market have encouraged many managers to spread capital too widely. In his view, that can leave portfolios carrying too many weaker ideas just as returns start to become more selective. “The tail will eat the head of returns,” he told Value Research Online, using the phrase to explain why he wants a smaller, tighter book rather than a long list of marginal holdings. The fund’s structure also allows short exposure of up to 25 per cent through futures and options, which the firm says can be used for hedging or pair trades rather than merely as a directional wager.
The launch is notable because many fund houses have begun their specialised investment fund offerings with lower-risk hybrid approaches. Sundaram has instead chosen a more demanding route, aiming directly at the less crowded end of the equity market. Moneycontrol reported that the firm’s executives see stronger earnings growth outside the top 100 names, while also acknowledging that larger companies still offer better valuation comfort. Sundaram’s own annual report also gives context for the move: it says some of its schemes lagged benchmarks because managers stayed cautious while small-company shares rallied sharply, and because liquidity conditions made active management harder.
Radhakrishnan has also used the launch to make a broader point about portfolio construction and investor behaviour. He argues that many investors in multiple mid-cap or small-cap funds end up owning an overlapping basket of hundreds of stocks, which can dilute the value of paying for active management. The fund, however, is not a plain vanilla alternative: it requires a minimum investment of ₹10 lakh, is offered only through accredited distributors, and starts without a performance record. As Sundaram frames it, the appeal lies not in instant scale but in consistency, with Radhakrishnan saying the firm wants a larger share of its assets to sit in the top two quartiles of performance over one- to five-year periods. Separately, Sundaram Finance’s annual report records his appointment as managing director of Sundaram Asset Management Company from 25 June 2024, underscoring that this launch sits within a broader management reset at the firm.
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