Vivriti launches ₹2,000 cr credit AIF fund
Vivriti Asset Management, a credit-focussed asset manager, has recently launched an alternative investment fund (AIF)- Diversified Bond Fund Series 2, with a goal of investing ₹2,000 crore in mid-sized companies. The purpose of the fund is to raise base capital of ₹1,500 crore and another ₹500 crore as a greenshoe option at a yield of 15-16%. The AMC (Asset Management Company) aims to raise funds from LPs (limited partnerships) currently active with them, and they look to achieve their first close by either June-end or early July.
Features:
- Alternative Investment Fund (AIF) catered for mid-sized companies
- Aims to raise base capital of ₹1,500 crore and another ₹500 crore as greenshoe option at a yield of 15-16%
- Focuses on trusted and profitable companies
- Aim to Raise Funds from Existing Limited Partnership (LPs)
The primary objective of Vivriti’s Diversified Bond Fund Series 2 is to invest in profitable mid-market companies with good cash flow and to use these funds to generate growth profits. The sectors of the companies investing in include healthcare, infrastructure, engineering, consumer-led businesses, and more. Vivriti AMC’s founder and managing director, Vineet Sukumar, said that there is potential for a significant amount of repeat investors from existing LPs, as they have already experienced good returns and expect similar success with this fund.
Benefits:
- Potential for good returns
- Fund invests in financially viable companies with good growth potential
Sukumar believes that the current market is quite favorable for Ultra HNI (high net-worth individuals) Chennai family offices, corporates, and insurance companies. Banks and regulated investors are not currently included due to the 18th December circular regulations.
Benefits:
- Ideal investing for Ultra HNI Chennai family offices, corporates, and insurance companies
- Fund is not limited by the recent 18 December circular regulations
It’s worth noting that the RBI (Reserve Bank of India) issued an order in December, wherein banks and non-bank lenders were required to sell their investments in AIFs. The new directive drew a lot of concerns, but in March 2024, the regulator eased those norms for the industry. The RBI stated that lenders needed to provide only the amount AIFs invested in debtor companies and not the entire amount invested by the lender in the AIF. RBI has also stated that this directive only includes investments, including hybrid instruments, and not equity shares of the debtor company.
Over the last five years, Vivriti AMC has raised ₹3,000 crore through multiple schemes under their two strategies. They raised ₹1,300 crore between 2019 and 2021 under their first strategy. Likewise, raised another ₹1,700 crore between 2021 and 2023 under their second strategy. The AMC has eight active funds, including a securitization fund of ₹500 crore operating at Gujarat International Finance Tec-City, located near Ahmedabad.
Features:
- Vivriti AMC focuses on stability rather than volatility
- The AMC has an active securitization fund of ₹500 crore operating at Ahmedabad
- A total asset 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
As a company that only focuses on mid-market investments, Sukumar explains that since the RBI December circular, lenders have sold their stakes in these funds to private wealth investors, including family offices. Since then, the group has cut the exposure to fintech NBFCs sharply because of the asset quality risks in the sector. They have reduced their exposure from double digits to single digits due to this fact.
Features:
- Vivriti has reduced its exposure to single digits from double digits after the December circular
- The Group’s funds are all about stability and not volatility
- Aims only to invest in the mid-market sector
In conclusion, Vivriti Asset Management has launched Diversified Bond Fund Series 2, aiming to invest in mid-sized companies for growth profits. The fund is focusing on profitable sectors (healthcare, infrastructure, engineering, consumer-led businesses) and has drawn significant attention from Ultra HNI (high net-worth individuals) Chennai family offices, corporates, and insurance companies, amongst others. Recent regulations prompted Vivriti to reduce its exposure to Fintech NBFCs. It is looking to lean towards companies that emphasize stability.
Key Takeaways:
- Vivriti Asset Management recently launched Diversified Bond Fund Series 2, raising ₹2,000 crore in mid-sized companies.
- The look to raise base capital of ₹1,500 crore and another ₹500 crore as a greenshoe option at a yield of 15-16%.
- Sectors such as healthcare, infrastructure, engineering, consumer-led businesses are of interest to this fund.
- RBI recently issued an order in December, prompting Vivriti to reduce its exposure to FinTech NBFCs.
- Vivriti has only focused on mid-market investing and has reduced the exposure of these risky sectors, even before RBI’s regulations.
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