DHFL re-aligns its Asset Management business

  1. Mumbai-based private sector Housing Finance major has announced the change in brand identity of DHFL Venture Capital to ArthVeda Fund Management as a first step towards a broader strategic vision
  2. The portfolio of ArthVeda is now poised to become highly diversified, offering new asset classes to include infrastructure, private equity, listed equities and others
  3. ArthVeda will enter investment niches where it will deliver superior risk-adjusted returns to the investors
  4. To reinforce its commitment in AMC business, the group has appointed the former CEO of DHFL, Mr. Bikram Sen, as the CEO of new AMC entity – ArthVeda

Mumbai, November 03, 2011: Dewan Housing Finance Corporation Limited (DHFL),India’s second largest housing finance company in the private sector, today announced the re-alignment of its Asset Management business. The company has redefined and expanded its AMC business by announcing the change in the brand identity of DHFL Venture Capital India Pvt. Ltd.(DHFLVC), a pioneer in real estate fund management to ArthVeda Fund Management Pvt. Ltd. (AVFM). The new brand identity is that of a fund management company that will restrict itself to only real estate funds but intends to grow its fund management business across different asset classes, such as, infrastructure, private equity, listed equities and others.

The successful re-alignment of AMC business and the broadened strategic vision created for ArthVeda will be under the stewardship of the senior-most and successful managers in the DHFL group, the former CEO of DHFL, Mr. Bikram Sen, who now becomes the CEO of ArthVeda Fund Management.

Announcing the realignment, Kapil Wadhawan, Chairman & Managing Director, DHFL said “Bikram helped propel DHFL from an asset book of approximately Rs. 1500 crores to nearly 2.5 billion dollars during his tenure as CEO. This was achieved, primarily on the back of organic growth achieved through establishment of new branches across tier II and tier III cities of India focusing on the lower and middle income housing segment.  Recently, he led the team that added another billion and a half dollars to DHFL’s asset book, inorganically this time, through the acquisition of Deutsche PostBank Housing Finance (renamed as First Blue after acquisition). With him at the helm of ArthVeda, I am extremely confident that ArthVeda Fund Management business will also grow as fast as DHFL has.”

Mr. Sen has a strong global investment banking, investing & trading background having worked for companies, such as, American Express, Chemical Bank (now JP Morgan Chase), Manufacturer Hanover and SBI. During his investment career, he has been associated with illustrious investors, such as, George Soros and Purnendu Chatterjee.  “Add the years of

experience to his calibre and mettle, and the future of ArthVeda appears positively bright and secure,” Mr. Wadhawan further added.

Commenting on the re-inforcement of DHFL’s commitment to AMC business and new brand identity, Mr. Bikram Sen, CEO, ArthVeda Fund Management said, “The new name signifies “Wealth from Wisdom”.  ArthVeda aims to provide “superior risk-adjusted returns”, i.e. “superior returns with same risks, or same returns with lower risks” through exercising its wisdom, knowledge and expertise.  ArthVeda will only enter investment niches where it can see that it will be able to deliver its stated objective of “superior risk-adjusted returns”.  So you will see products coming from ArthVeda which will deliver on this promise.  Otherwise, the product will not be launched.”

Mr. Sen has envisioned a vastly expanded strategic field beyond real estate fund management for the AMC to include other asset classes, such as, infrastructure, private equity, listed equities and others.  Hence, the proposed name change from DHFL Venture Capital India Pvt. Ltd. to ArthVeda Fund Management Pvt. Ltd.

Given DHFL’s background in housing finance, it was natural to start-off the first fund with a focus on real estate management in 2006.  The primary goal of the fund was to invest ingreenfieldprojects and hence it was named as a venture capital fund.  Further, the housing real estate focus of the fund was reflected in its using the DHFL brand name. “With Indian economy so crucially set to explode in the near future, we expect ArthVeda to be an active participant in this.” concluded Mr. Sen.

Background

DHFLVC raised its first fund (Rs. 101 crores) the DREAM Fund-1 in 2006-07 and has had one of the best performances in its peer group of real estate investment funds.  It has so far made 6 exits with IRRs ranging from 20% to 45%.  It has provided investment returns of about Rs. 34 crores to investors and also returned capital of Rs. 8 crores so far.  Currently, about Rs. 93 crores is still invested in 7 projects.  These are currently valued at Rs. 133 crores based on mark-to-market and have a projected valued of Rs. 175 crores.