Vivrithi Asset Management, a fixed-income alternative investment fund (AIF) platform that provides debt financing to domestic mid-market companies, aims to increase its Assets Under Management (AUM) to $5 billion by FY26 is, its founder said.
“We are very optimistic about the growth potential of the mid-market segment and aim to create an AUM of $5 billion by FY26,” said Vineeth Sukumar, Founder and CEO, Vivruti Asset Management.
Not many players are lending to this segment, he added. According to the company, the mid-market comprises companies with revenues of over Rs 50 crore to Rs 5,000 crore.
The demand is so high that in the past one year, debt asset managers had brought in at least five alternative asset funds.
“India’s underpaid debt markets provide investors with highly impactful and yet commercially profitable investment opportunities and a fund house like Vivruti efficiently channelizes much-needed finance,” he added.
The fund house invests in loans of small and medium sized financial institutions for lending to micro enterprises and other well funded companies.
“We aim to bring a performing debt market to investors in India and abroad – a market with tremendous potential, and a significant gap between perceived and actual risk,” Mr. Sukumar said.
Vivruti Capital, the parent company of Vivruti Asset Management, a mid-market NBFC, lends to small and medium-sized businesses. It recently closed an $85 million Series C investment round.
The company had earlier this month raised $55 million from existing investors Lightrock & Creation Investments and about $30 million from TVS Shriram Growth Fund.
With this round of funding, Vivritti Capital plans to grow its portfolio in its target segment. At present, both NBFCs and AIFs jointly manage assets of a little over ₹5,200 crore. “In outside history, we had just one write-off. Our hard work and focused approach has kept gross non-performing assets at 0.25% of our portfolio,” Mr. Sukumar said.
“Basically, both companies lend to operating companies which are doing well and are not defaulting and we call this space performance of credit space. The AIF develops the funds it lends, and the NBFC lends directly…” he said.
“… If I look at it in terms of credit ratings, you would have unrated companies, BBB rated companies and A rated companies (not AA or AAA). Large lenders do not lend to this segment. We Trying to bring in a huge pool of capital from investors who accept our risk appetite and underwriting and lend to this segment,” he said.
In addition to building its corpus for borrowings, Vivritti Capital is investing in technology to pick up on early distress signals from its portfolio companies. It is developing technology to map the digital footprint of lending companies into the future.