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IDFC India Equity Hedge (IEH): Conservative Fund

IDFC India Equity Hedge (IEH): Conservative Fund

About Company

IDFC AMC, which was founded in 2000, is one of India’s top asset managers, with an average AUM of about Rs. 1,20,000 crores as of December 2020, spread over more than 60 mutual fund schemes. It has a seasoned investment team with a strong presence on the ground in over 46 cities, as well as investors in over 375 cities and towns across India. IDFC AMC is dedicated to assisting savers in becoming investors and building wealth. To help achieve this goal, the AMC provides a variety of carefully created investment products in stocks, fixed income, and liquid alternatives, all of which are designed to deliver performance that is consistent with their well-defined objectives.

Category: AIF, AIF Category III

Fund Snapshot

Minimum Investment: INR 10 Million (or as per extant SEBI AIF Regulations)
Final Closing: 18 months from First Closing (excluding extensions, if any)
Investment Period: 5 years from First Closing
Fund Term: 8 years from Final Closing
Management Fee: 2% p.a.

Unique Feature

Trusted Brand Name

  • Strong brand identity in the Indian ecosystem
  • Partner of choice for global and domestic investors

Access to Proprietary Deal flow

  • Longstanding relationships across the ecosystem of Indian businesses: owners/promoters, bankers, regulators, policymakers and consultants
  • Being one of India’s largest banks, well connected across the spectrum of small, medium and large corporates

Deal lifecycle

  • Sectoral expertise and information
  • Institutional knowledge and experience
  • Privileged market insights from networks with key stakeholders
  • Relationships across the value chain

Access to a large pool of talent and infrastructure

  • Support from the banking, insurance, capital markets intermediation and asset management teams
  • Access to financing options/ M&A advisory

Strong ESG focus

ICICI Venture endorses UNDP SDG Impact Standards for Private Equity Funds

  • Standard 1 :

Strategy: Embedding foundational elements into purpose and strategy

  • Standard 2:

Management Approach: Integrating foundational elements into operations and management approach

  • Standard 3:

Transparency: Disclosing how foundational elements are integrated into purpose, strategy, management approach and governance, and reporting on performance

  • Standard 4:

Governance: Reinforcing the commitment to foundational elements through governance practices

Private Equity Strategy

The centrepiece strategy of ICICI Venture is private equity. ICICI Venture primarily invests in mid-market businesses in India that have a compelling value proposition in the form of a dominating or leading franchise, great growth potential, and long-lasting advantages over rivals domestically or abroad. To assist these firms in enhancing their operations and positioning themselves for future growth in their specialised markets, ICICI Venture offers growth equity to enterprises. We also engage in control and joint control transactions with carefully chosen partners. No of the stake, we always invest with the “majority attitude.”

Numerous industries, including banking and financial services, insurance, water, media and entertainment, food, quick service restaurants (QSR), diagnostics, healthcare, biopharmaceuticals, speciality chemicals, branded apparel, etc., have seen the rise of ICICI Venture-backed companies as industry leaders. India Advantage Fund Series 1, India Advantage Fund Series 2, India Advantage Fund Series 3, India Advantage Fund Series 4, and India Advantage Fund Series 5 are the 5 PE Funds that ICICI Venture PE has invested in, totalling around 55 firms.

Value Add

Developing and implementing strategic, operational, and financial initiatives: By developing and implementing strategic, operational, and financial initiatives aimed at enhancing portfolio companies’ competitive positions relative to their peers and industry benchmarks, value is sought to be created in portfolio companies. Hiring/strengthening management: Where appropriate, ICICI Venture will work with firms to find any gaps in the management team of a portfolio company and fill them, as well as build a talent retention plan.

Identifying acquisition candidates by their expansion strategy and putting their acquisition plans into action are two areas where ICICI Venture may try to help its portfolio firms. Because it is a member of the ICICI Group, ICICI Venture has access to the resources and expertise of ICICI Bank and other ICICI Group businesses.

Corporate Social Responsibility

The ICICI Group has always been committed to CSR and plays a crucial role in all of the company’s operations. The Company, the Group, and the larger community are all involved in implementing the Group’s Contribution to the development of the social sector, which comprises several innovative initiatives. The CSR goal of ICICI Venture is to actively assist significant socioeconomic development in India and make it possible for a bigger population to participate in and profit from that country’s economic growth. This is based on the idea that development and progress are only successful when they lead to greater access to opportunities and favourable outcomes for a larger segment of society.

The majority of the company’s CSR initiatives are concentrated in the fields of education, health, skill development and sustainable livelihood, financial inclusion, capacity building for CSR, and any other initiatives the company deems necessary to achieve its CSR goals. The CSR committee is the governing body that defines the scope of CSR operations and oversees compliance with the CSR policy. In contrast, the CSR policy of the Company establishes the framework directing the Company’s CSR activities.

Foundational Elements of the UNDP SDG Standards

Contributing positively to sustainable development and achieving the SDGs cannot be achieved without demonstrating respect for human rights, planetary boundaries and other responsible business practices and is realised through effective impact management and decision-making.

India Advantage Fund Series 5 Would Seek To Invest Around 3 Investment Themes

  • ASPIRATION: Aspiration driving access and opportunity
  • TECHNOLOGY: Technology to enable disproportionate growth and disruptive business models
  • ATMANIRBHAR: India manufacturing is driven by Atmanirbhar Bharat and the “China+1” strategy

Focused Sectors

  • BFSI: Bank, NBFC, Insurance, Payments
  • Consumer: Beauty & Personal Care, Food Services, Online Retail, Home & Kitchen Appliances
  • Healthcare, Pharma: Hospitals, Diagnostics, Pharma, Health Tech
  • Manufacturing: Speciality Chemicals, Processed Food, Electrical Equipment, Engineering Goods

The Key Pillars of India Advantage Fund Series 5

  • Sector agnostic; focused on BFSI, Consumer, Healthcare & Pharma, Manufacturing, Digital
  • 10-12 deals; Focus on diversification of portfolio, exit strategies
  • India focused; View on India 2030
  • “No Go”: RE, Infra, special sits commodity; Early stage
  • Tap synergies acrossICICI Group
  • Best in class ESG practices
  • Growth PE (INR 1.50-3.00 Bn per deal), control, joint control (INR 3.00-5.00 Bn per deal)
  • Minority investing with the majority mindset; Drive operational excellence in portfolio companies
  • Target GrossINR MoIC of 2.5x-3x at a GrossINR IRR of 25%-30%

Fund Overview

ICICI Venture is the Settlor, AIF Sponsor, and Manager of the Feeder Fund. It is structured as a close-ended, contributory, determinate trust and registered with SEBI as a Category II AIF (Fund of Funds). Will only make investments in India Advantage Fund S5 I, a close-ended contributory determinate trust registered with SEBI as a Category II AIF (Master Fund). The Master Fund’s Settlor, AIF Sponsor, and Manager are all ICICI Venture.

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Disclaimer: Investing in AIF, PMS, Gift City or Mutual Fund is subject to market risk. Please read the related documents carefully. Past performance does not guarantee future results and there is no assurance that the managed accounts will necessarily achieve their objectives. Actual portfolios may differ as a result of account size, client-imposed investment restrictions, the timing of client investments and market, economic, and individual company factors. We at ALTPORT do not guarantee any returns in the hands of investors, nor do we take any sort of accountability for the performance of the scheme.

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