ArthVeda to hike Nifty-linked fund corpus to Rs 250 crore

NEW DELHI: ArthVeda Fund Management – the private equity investment arm of housing finance company Dewan Housing Finance – is looking to raise the corpus of its Nifty-indexed L50 fund after receiving strong commitments from wealth management firms and family offices.

The Mumbai-based fund management firm, which has targeted assets under management of $1 billion (about Rs 6,000 crore) by 2015-16, will now raise the corpus of its L50 fund to Rs 250 crore, up from Rs 150 crore, under portfolio management services scheme, according to sources with direct knowledge of the development.

“ArthVeda will also look to increase its fund corpus to Rs 200 crore (from Rs100 crore now) under the AIF regulations, once it gets the necessary approvals from Sebi,” the source said, requesting anonymity.

Vikas Gupta, executive vice-president, traded markets and investment research, and who is leading the L50 fund-raising efforts, declined to comment on the developments.

The L50 fund is based on Nifty index, where it will buy into all 50 stocks with a mandate to generate very high returns (alpha) to investors. ArthVeda is also planning to launch the same as an off-shore fund for foreign institutions.

“Nifty stocks have to pass stringent tests to be included in the index, thereby making them cautious investment call, which also safeguards our portfolio,” said Rajat Dhar, managing partner of Delhi-based Cogent Advisory Services, a wealth management firm.

Dhar also confirmed that Cogent Advisory Services, which manages assets of ultra-high net worth individuals to the tune of Rs 126 crore, will invest in the fund.

“On a conservative basis, we are expecting returns of 3% to 4% above the Nifty-50 returns,” he said.

Other wealth management firms, such as Asit C Mehta, and family offices, including Altamount Capital, are also believed to be in talks to invest in the fund.

“We have not finalised anything yet. We have had discussions with them (ArthVeda), but are yet to commit,” said Richa Karpe, co-founder and executive director of Altamount Capital Management.

The developments come a few months after EThad reported that the launch of ArthVeda’s first infrastructure debt fund – The Rs 200 crore ArthVeda ANU credit fund – that was launched April earlier this year.

The L50 fund, which is expected to have a minimum buy in of Rs 25 lakh per investor, will be an open-ended fund under the PMS scheme, and a long-dated fund under AIF regulations.

Franklin Templeton and Goldman Sachs are among the global diversified financial services giants that have already launched exchange traded funds that track the Indian indices.