This comes through its subsidiary, Northern Arc Investment Managers (NAIM), aims to raise a target corpus of Rs 1,500 crore, including a green shoe option of Rs 5 crore.
Category II AIF (Alternative Investment Funds) refers to a specific classification of investment vehicles in India which employ strategies such as private equity, debt, or a mix of both. They may invest in unlisted securities, real estate, or other non-traditional assets.
The Finserv Fund is designed to leverage Northern Arc’s extensive experience, innovative financial solutions, and robust risk management practices.
The fund aims to make a meaningful impact on economic growth and financial inclusion across six key sectors: Micro, Small, and Medium Enterprises (MSMEs), Affordable Housing, Vehicle Finance, Agricultural Finance, Microfinance, and Consumer Finance.
‘Finserv Fund’ launch marks another significant milestone in Northern Arc’s mission to bridge the financial gap for underserved individuals and businesses by leveraging our pivotal strengths in proprietary data and technology,” says Ashish Mehrotra, Managing Director & CEO of Northern Arc.“Through NAIM, a Northern Arc subsidiary, we have invested over INR 100,500 million largely in financial institutions since inception, with zero defaults to investors to date,” he said.By investing in a diversified pool of debt securities from financial institutions, the fund will focus on generating higher risk-adjusted returns and providing regular cash flows for investors.
Northern Arc’s established financial ecosystem includes a vast network of originator partners, which enhances its ability to support financing efforts effectively.
Robust Track Record
As of June 30, 2024, Northern Arc manages an asset under management (AUM) of Rs 14,639 crore across its balance sheet and active AIF funds.
The company boasts a strong track record with four successful fund exits, yielding net fund returns ranging from 11.72% to 15.77% post-expense pre-tax, all achieved without any delays or defaults.
“The Finserv Fund is the 11th AIF launch from our fund management platform apart from the 2 PMS funds we manage. We have successfully closed and exited four funds at higher-than-targeted returns to our investors,” says Bhavdeep Bhatt, CEO of Northern Arc Investments.
“It will invest in a well-diversified portfolio across 45-55 entities within our key sectors. This fund targets gross returns of 14.00-14.50% XIRR over its four-year tenure, with a deployment period of approximately six months from the final close,” he said.
