Vivriti launches ₹2,000 cr credit AIF fund

  • The AMC looks to raise money from existing limited partnerships and complete the first close by either June end or early July.

Gopika Gopakumar
First Published17 Jun 2024, 07:26 PM IST
The fund will invest in mid-market companies, which are profitable and have good cash flows, and will use these funds for growth purposes.
The fund will invest in mid-market companies, which are profitable and have good cash flows, and will use these funds for growth purposes.

Vivriti Asset Management, a credit focussed asset manager, has launched a new alternative investment fund (AIF) called Diversified Bond Fund Series 2, with the aim of investing 2,000 crore in mid-sized companies.

The fund looks to raise base capital of 1,500 crore and another 500 crore as a greenshoe option at a yield of 15-16%. The AMC looks to raise money from existing limited partnerships (LPs) and complete the first close by either June-end or early July.

The fund will invest in mid-market companies, which are profitable, have good cash flows, and will use these funds for growth purposes. Healthcare, infrastructure, engineering, and consumer-led businesses are some of the sectors that the fund is looking at investing in.

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“We expect a significant amount of repeat from existing LPs, given that they've had a good experience both in terms of returns as well as in seeing their money being made to work quickly,” said Vineet Sukumar, founder and managing director, Vivriti Group. "The current market is fairly conducive after the break between December and March. We think that there is a fair amount of tailwind that is there across each category that we are tapping into, which is Ultra HNI (high networth individuals) Chennai family offices, corporates as well as insurance companies. Banks and regulated investors are now completely out on account of the 18 December circular," he added.

In December, RBI ordered banks and non-bank lenders to sell their investments in AIFs, which had further invested in companies to which the lenders had given loans in the previous 12 months; otherwise, they had to make 100% provisions against these investments.

In March 2024, the regulator relaxed the norms after it recieved representations from industry bodies. It said lenders needed to provide for only the amount the AIF invested in the debtor company, and not the entire amount the lender invested in the AIF. RBI also said its directive does not cover equity shares of the debtor company, but all other investments, including hybrid instruments.

Over the last 5 years of its existence, Vivriti AMC has raised 3,000 crore via multiple schemes under two strategies. In the first strategy the AMC raised 1,300 crore between 2019 and 2021, 80% of which has been returned to LPs. Under the second strategy the fund raised another 1,700 crore between 2021 and 2023.

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The AMC has eight active funds including a securitisation fund of 500 crore operating from Gujarat International Finance Tec-City near, or GIFT City, near Ahmedabad. The total assets under management (AUM) is 2,750 crore after having returned capital. The fund has deployed 4,500 crore and returned 1,000 crore to clients.

"We are completely demand focused because we have only one segment that we want to go after which is mid market and we're going deeper and deeper and deeper there," said Sukumar.

He also explained that ever since the Reserve Bank of India came out with its circular in December, lenders have sold their stakes in these funds to private wealth investors including family offices. The AMC, which typically has 35% exposure to non-bank lenders through various funds, has cut its exposure sharply to fintech NBFCs owing to the asset quality risks in the sector.

“We have reduced our exposure to single digit from double digits. Vivriti's funds are all about stabiliity and not volatility. We continue to remain cautious on a segment where touch point with the borrower is relatively low,” he said.

Also read | FPIs slash bearish bets ahead of Union budget, set stage for rally

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First Published:17 Jun 2024, 07:26 PM IST
HomeCompaniesVivriti launches ₹2,000 cr credit AIF fund

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