ArthVeda Fund Management Company (AVFM) is a part of the financial services group. It is a subsidiary of WGC. AVFM is in the business of asset management, with a focus on alternative investment funds covering asset classes such as real estate.
The group companies and its associate concerns and other connected parties are into various lines of business including construction, housing finance & mortgage finance into affordable mid & low income housing in India (largely into Tier I, II and III cities), the conglomerate has had an asset base of USD 25 bn, lending almost USD 300 mn per month across India, through its 500+ locations and 5000+ employees.
With 19 mn shortage of urban housing units in India, requiring ~USD 1.7 tn and the lack of construction & mortgage finance into the affordable mid & low income housing; Indian government has recently relaxed the FDI guidelines to attract foreign capital into the affordable housing (smaller projects with shorter duration & faster turnaround). Not only that, it has also relaxed the way foreign capital can flow into India by allowing direct investments into SPVs in India and still get the same tax benefits. This is to support Indian Government’s flagship program of “Housing For All by 2022”.
By virtue of being into affordable mid & low income housing finance for last few years, The group and AVFM has catered to about 63% of this total market, which would need ~ USD 1 tn of funding by 2022. AVFM has envisioned this much earlier in 2006 when it launched its first domestic fund in India and the second fund in 2012, providing capital to the affordable mid & low income housing in India. First fund is completely exited and the second is expected to exit by October 2019.
AVFM is very uniquely positioned to capture this huge size of opportunity due to its long pedigree in this segment and with complete backward integration of construction & mortgage financing. And now with the relaxation of FDI norms, The funds of which AVFM is investment manager qualifies to raise international capital for smaller projects with shorter duration & faster turnaround (low land to sales value) and in turn provides flexibility to structure be-spoke customized solutions to the investors.