Asset management firm Northern Arc Investment Managers Pvt. Ltd aims to raise as much as Rs 250 crore ($38 million) for its sixth debt fund and has already mopped up a large part of the target corpus.
The company, formerly known as IFMR Investment Managers Pvt. Ltd, said in a statement the IFMR FImpact Income Builder Fund has a base size of Rs 150 crore and an overallotment option of Rs 100 crore. The fund has raised Rs 110 crore thus far, it added.
Northern Arc Investment, a subsidiary of non-banking financial company Northern Arc Capital Finance Pvt. Ltd, had launched the fund in January after registration with the capital markets regulator Securities and Exchange Board of India.
It has deployed Rs 105 crore in four companies: Leap India, Satya Microcap, Fusion Microfinance and Chaitanya India Fin Credit. The fund aims to hit the final close by the end of June.
The fund has received investments from high-net-worth individuals, family offices and corporate houses. The Northern Arc Group will provide 10% of the fund’s corpus.
“The IFMR FImpact Income Builder Fund is our first in a series of short-term credit funds aiming to deliver higher risk-adjusted returns to investors,†said Ravi Vukkadala, chief executive at Northern Arc Investment.
It is a close-ended fund with a tenor of three-and-a-half years. It aims to make eight to 10 investments, with a ticket size of around Rs 20 crore. It will focus on companies that operate in segments such as microfinance, small business loans, affordable housing, commercial vehicle finance, agri-business finance and corporate finance.
Northern Arc Investment had launched its first debt fund in 2014 with a corpus of Rs 100 crore to lend to microfinance institutions. It raised its second fund in early 2016 and third fund later in the year. The fourth and fifth funds were floated last year.
The company’s parent, Northern Arc Capital, was established in 2008 with a focus on the microfinance sector. It caters to 140 financial institutions across affordable housing, small business, agriculture finance and other segments.
Northern Arc Capital, formerly IFMR Capital, has hired three merchant banks for a planned initial public offering, VCCircle reported in February.