Objective

The broad objective of IFMR FImpact Medium Term Opportunities Fund (“Fund”) is to promote financial inclusion in India by enabling direct and indirect financing of microfinance institutions, small enterprises, affordable housing, commercial vehicles, agriculture and corporate finance and its underlying assets and to earn higher risk-adjusted returns by leveraging on the underwriting expertise of the IFMR Group. The fund has a lock in of 5 years.

Investment Strategy

The Fund will invest in a diversified pool of securities in issuers working in the microfinance sectors, affordable housing, small business loans, commercial vehicle finance, agri-business finance and corporate finance sector and earn higher risk-adjusted returns. The Fund will seek to participate in sub-sectors within financial services that cater to informal sector / financially excluded households and enterprises. The Fund Manager will seek to benefit from the vast expertise, underwriting, risk management and credit history of Northern Arc Capital.

Investing in a mix of securities

Providing growth capital for Portfolio Entities in the form of investments in senior secured bonds, unsecured bonds, subordinated debt, redeemable preference shares, commercial papers, pass through certificates (PTCs), market-linked debentures, debt funds and other permissible securities accordance with the Regulations and other Applicable Laws.

Alternate source of domestic funding

The Fund seeks to enable diversification by way of both funding sources and type of funding for its Portfolio Entities.

Access to bond market

The Fund will help in the development of bond markets in India.

The broad contours of the Fund
Issuer A Category II Alternative Investment Fund (AIF) registered with SEBI
Proposed size Rs 250 crores, with a green shoe option of INR 250 crores
Geographic Focus India
Tenor and Maturity 5-year, close-ended (including redemption timeline)
Payouts Periodic payments: Quarterly surplus payouts Principal: Bullet repayment
Listing Units issued by the AIF will be listed if permitted by regulations (presently, the framework for listing of AIF units is not in place).
Nature of investments Investments will be made in rated senior secured bonds, unsecured bonds, subordinated debt, redeemable preference shares, commercial papers, PTCs, liquid debt funds and other instruments permitted by extant regulations
Investment Availability Primary

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