Exhilway Private Capital Market will invest in the emerging companies via its alternative investment fund called SME VIVO scheduled to hit markets in January, 2013.
Exhilway Private Capital Market (EPCM), India's largest platform for the business funding of the unlisted companies plans to raise INR 160 crore or US $30 million in its debut SME Alternative Investment Fund (AIF) named SME VIVO.
The fund will have the benefit of capital protection and the minimum annual return of 25% per annum via a strategy called return locking.
SME VIVO AIF will raise funds from the high net worth individual investors. The minimum entry size for the fund as per the Securities Exchange Board of India (SEBI) guidelines is kept at INR 1 crore or US $185,200.
SME VIVO AIF will be registered as a Category - I SME Fund with the India's regulatory body SEBI and will invest in the growing and emerging companies. The fund will initiate the process of seeking commitments in the first week of January, 2013.
"The investment in the growing and emerging companies holds a great potential, if everything goes in accordance with the implemented strategies the returns may go as high as 100% per annum," said Kushal Rungta of Mumbai based Bear Bulls Investment Advisors.
SME VIVO AIF will invest in diversified business sectors like Media, Information Technology (IT), Finance, International Trading and Pharmaceutical.
The participant companies in the SME VIVO AIF has undergone strict business rating and the valuation process before their entry into the fund is finalized.
"This fund is similar to a debt product, we have roped in Deberry Ventures, a Denmark based PE fund to back us. If we fail to generate return or our strategies result in the loss of capital, they will buy the entire fund along with the return of 25% per annum. We are confident to generate much higher returns than planned," said Monica Kujawa, the fund manager for the SME VIVO AIF.
SME VIVO AIF will invest in the emerging companies for the minimum term of 3 years and will exit on the India's leading SME stock exchanges.