Vivriti Asset Management, a fixed-income Alternative Investment Fund (AIF) platform, that provides debt financing to domestic mid-market companies has set a target to grow its Assets Under Management (AUM) to $5 billion by FY26, its founder said.
‘We are very optimistic about the growth potential the mid-market segment offers and aiming to build an AUM of $5 billion by FY26,” said Vineet Sukumar, founder & CEO, Vivriti Asset Management.
He said not many players were lending to this segment. As per the company, mid-market comprises companies with a revenue of more than ₹50 crore to ₹5,000 crore.
The demand is so high that the debt asset manager had come out with at least five alternative asset funds in last one year.
“India’s underpenetrated debt markets offer investors highly impactful and yet commercially rewarding investment opportunities and a fund house like Vivriti channelises the much-needed finance efficiently,” he said.
The fund house invests in debt of small- and mid-sized financial institutions to onward lend to microenterprises and other well-funded companies.
“We seek to bring the performing credit market to investors in India and abroad – a market with tremendous potential, and a significant gap between perceived and real risk,” Mr. Sukumar said.
Vivriti Asset Management’s parent company Vivriti Capital, a mid-market NBFC, lends to small and medium-sized business. It recently closed $85 million Series C investment round.
The company had raised $55 million from existing investors Lightrock and Creation Investments and approximately $30 million from TVS Shriram Growth Fund earlier this month.
Armed with this round of funding, Vivriti Capital plans to grow its portfolio in its target segment. Currently both the NBFC and the AIF jointly manage assets of little more than ₹5,200 crore . “In out history, we just had just one write off. Our strict due diligence and focussed approach has kept the gross non-performing assets at 0.25% of our portfolio,” Mr. Sukumar said.
“Fundamentally, both companies lend to operating companies that are running well and not defaulting and we call this space performing credit space. The AIF develops funds that it lends, and the NBFC lends directly…” he said.
, “…if I look at it in terms of credit ratings, you will have unrated companies, BBB rated companies and A rated companies (not AA or AAA). Big lenders do not lend to this segment. We are seeking to bring in very large pools of capital from investors who accept our risk appetite and underwriting and lend to this segment,” he added.
Besides building its corpus for lending, Vivriti Capital is investing in technology to pick early distress signals of its portfolio companies. It is also developing technology to map the digital footprint of companies it would lend in the future.