Corporate Profile
Confidential. For intended users only.
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IndexPage No.
About ArthVeda Fund Management Pvt Ltd (AVFM)
3
About Dewan Housing Finance Corporation Ltd (DHFL)
4-6
AVFM Business Philosophy 7-10
AVFM Company Structure 11
AVFM Funds 12-14
AVFM Board of Directors and Team 15-17
Disclaimer 18
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ArthVeda Fund Management Pvt Ltd (AVFM)
ArthVeda Fund Management Pvt. Ltd. was established in 2005 and was earlier known as DHFL Venture Capital India Pvt. Ltd. (DHFLVC). A new management took over AVFM in 2010 and the strategic vision of DHFLVC was expanded to include (but not limited to) alternative asset classes, including, private equity, infrastructure, agriculture, debt and fixed income and trading markets besides real estate. DHFLVC was renamed as AVFM to better reflect this change and the company’s expanded vision.
AVFM is a subsidiary of Dewan Housing Finance Co. Ltd. (DHFL)–the third largest home mortgage finance company in India. DHFL is listed on BSE & NSE and has been rated CARE AA+, BWR FAAA & CRISIL P1 indicating high standards of business management.
The objective of AVFM is to float funds that offer ample opportunities for extracting alpha, i.e. high risk-adjusted returns. AVFM’s investing philosophy is based on “Value Investing” in all its products.
AVFM– Wealth from Wisdom
DHFL Group Structure
DHFL Group
First Blue Home
Finance Ltd.
DHFL & DHFL Vysya
Housing Finance
Aadhar (IFC holds
20%)
DHFL Property Services
DHFL Technical Consultan
cy
DHFL Insurance Services
Premium housing finance
Mid-income housing finance
Low-income housing finance
Property marketing and sales
Technical consultan
cy and project
management
Distribution of
insurance products
AVFM
Housing and construction finance
Ancillary services
Asset management services
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About DHFL
1As of 25 Apr 20122 Unaudited1 USD=50 INR
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• 2nd largest mortgage finance company in the private sector; 3rd largest overall (by market cap as well as sales turnover)1
• Consolidated loan book of approx. Rs.25,000 crores ($5.1 Bn) as of 31 Mar, 20122
• Current market cap of close to Rs 2,600 crores ($520 Mn) 1
Market position
Focus
Operational
strength
Performance
Diversified
shareholding
• Pioneers in mid-income Rs.15- 40 lakhs per unit ($30,000-80,000 per unit) and low-income Rs.4-15 lakhs per unit ($8,000-30,000 per unit) housing finance
• Focus on Tier II/III cities
• Extensive marketing network with more than 226 marketing offices regrouped under 7 Regional Processing Units.
• Over 1000 personnel in branches/service centers• Each branch has credit, technical (civil engineering),
accounts and sales teams
• Growing at approx. 42% compound annual growth rate (CAGR) for the past five years (and at approx. 50% including First Blue)
• Listed on BSE and NSE with well-diversified shareholding including Caledonia Investment Trust (UK)
Marketer of Year
DHFL wins Marketer of Year – Realty Plus Excellence Awards of the Year – 2012
Greentech HR Excellence
Award
DHFL wins Greentech HR Excellence Award – 2012 for Best Strategy (Gold Award)
Global Greentech
Award
DHFL’s HR team wins Global Greentech Award for Technology Excellence in HR - 2010
Realty Plus Newsmaker
DHFL Wins “Realty Plus Newsmaker of the Year-2011
Asia’s Best Employer
Brand Award
2nd Asia’s Best Employer Brand Award for Excellence in HR through Technology - 2011
Awards won by DHFL
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AVFM principles
We will always…
Identify and invest in pockets of inefficiencies
Gain extensive understanding of a fund, through research, before
venturing into it
Exercise as much due-diligence in our investment decisions as we would with
our own money
Strive to partner with the best external advisors to
ensure utmost due-diligence at deal and fund level
Ensure maximum possible transparency to investors without jeopardizing the
returns
Invest in ideas just because they are popular
Invest just because time is running out
Over-concentrate in any asset-class/ schemes/
investees
Deviate from predetermined budgets
Agree to unrealistic demands by a highly-
pursued investee
We will never…
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Differentiators
Value-investing
Leverage group
strengths
Holistic service to investors
India’s growth story- a fresh perspective
Strong team
Robust structure and
processes
• Strong focus on research driven funds and adequate ‘margin of safety’ at all stages of the investment process
• AVFM to leverage DHFL group’s strengths in real estate and asset management in the initial few funds (housing/ infrastructure)
• Ensure transparency, regular interaction, investor education and strive to create a secondary market for its funds
• Systematic identification and pursuit of pockets of inefficiencies
• Not running after popular areas of investment in the country
• Highly competent team with extensive industry experience
• Professional management with CEO’s focus largely on strategic issues
• Independent advisors and committees in place for regular supervision
• Process-driven approach for all important decisions
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Independent review and supervision of each key process by either external auditors (E&Y, KPMG, CARE, NDA etc.) or by
specific committees with unbiased experts
Value-investing- core of AVFM philosophy
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Wealth(Arth)
Wisdom(Veda)
from
… maintaining margin of safety
(significant discount to intrinsic value)
Ensure sufficiently high returns while…
Estimation of intrinsic value
Research and analysisUnderstand and mitigate risks
Value-investing
AVFM follows value-investing philosophy at each stage of its investment process.
But why value investing?
Holistic service to investors
Transparency
• Disclose all relevant information
• Organize project site-visits
• Share project-progress updates
Regular interaction
• Regular interaction with the AVFM team
• Explore possibility of an AGM
• Dedicated team to handle queries and grievances
Investor education
• Form an online portal dedicated to investor education
• Advise to avoid ‘fashionable’ investments
Secondary market
• Strive to provide a price-discovery mechanism and secondary market for interim-exits
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• Extensive industry and functional experience
• Wide network of contacts
Strong core team with ambitious vision
CEO Mr. Bikram Sen
InfrastructureMr.
Lokanathan Nadar
AgricultureMr.
Lokanathan Nadar
HousingMr.
Lalit Kant
Unlisted equity
Mrs. Jyothi Prasad
DebtMrs.
Jyothi Prasad
Trading Markets
Dr. Vikas Gupta
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• Launch funds in diverse verticals to capture higher market share
• Funds to cater to varying needs of liquidity and asset-class exposure
• Provide comprehensive portfolio management services to the clients
• Provide common value-investing philosophy to the clients
AVFM Timeline
2012-13 2013-14 2014-15
Housing
Infrastructure *
Housing
Infrastructure
Agriculture *
Unlisted equity *
Debt *
Trading Markets *
Mid-income* ArthVeda
STAR
Low-income*
Township*
Housing
Infrastructure
Agriculture
Unlisted equity
Debt
Trading Markets
Leverage group’s strengths in the initial few funds
Experience and in-house expertise to drive further growth
12* New Vertical
2005-06
DREAM Fund-1
Mid-income ArthVeda
STAR
2011-12
Housing *
DREAM FUND I
Exits 6 of 13
IRR 20-45%
Investment corpus approx . Rs.101 crores ($20 Mn)
Ongoing 7
Projected valuation Rs. 175 crores
($35 Mn) 1
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1 USD=50 INR
Capital redemption Rs. 8 crores
($1.6 Mn)
Net profit distribution
Rs. 34 crores($6.8 Mn)
ArthVeda STAR (Middle Income Housing Fund)
Fund lifeThree years (option of extension by two terms of one year each) after complete drawdown
Fund sizeRs.200 crores ($40 Mn) with a greenshoe option of Rs.100 crores ($20 Mn)
Minimum commitm
ent
Option 1- Rs.10 lakhs ($20,000)Option 2- Rs.25 lakhs ($50,000)
Drawdown
Option 1- Upfront; Option 2- Upfront 20%; balance in 2 instalments (40% each) within three months of previous drawdown
PeriodCommitment period of six months from the date of final closure
Fee structure
Entry load 2%Carried interest 20% with catch-upManagement fees 2% p.a.
ReturnsTarget return 30% (gross IRR)Hurdle rate 12% pre-tax p.a.
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1 USD=50 INR
AVFM Board of Directors
Kapil Wadhawan (Chairman & Managing Director)• PG Masters in Business Administration (specializing in
Finance) from Edith Cowan University, Perth, Australia.• Led robust growth of DHFL making it a leading
mortgage lending company in India.• Great knowledge and understanding of real estate and
financial markets in India.
Bikram Sen (Director & Chief Executive Officer)• Over 33 years of experience in Global Investment
Banking, Investing and Trading having worked for cos. such as American Express, Chemical Bank (now J P Morgan Chase) and SBI and with large fund houses like Quantum (US based George Soros) and The Chatterjee Group.
• Former MD of Chemical Bank, Tokyo, and former CEO of DHFL.
• Helped propel DHFL from an asset book of approx $300 Mn. to approx $2.5 Bn.
• Led the acquisition of Deutsche Postbank Home Finance adding another $1.5 Bn to DHFL’s asset book.Narayan Sheshadri (Director)
• Member of Institute of Chartered Accountants of India.• Over twenty-two years of audit, consulting and industry
experience and worked in senior positions at KPMG in London, largely in the financial services and property sectors.
• Served as a member of Forex Market Policy Committee set-up by the Reserve Bank of India.
Ajay Vazirani (Director)• Solicitor and a Partner with Hariani & Co., Advocates
and Solicitors.• Substantial experience in real estate, corporate and
commercial deals related to private placement of equity and venture capital funding.
• Handles matters relating to dispute, resolution including court litigation and arbitration.
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Executive Committee
Dr. Vikas V Gupta (Head- Research & Product Development and Trading Markets) • A B.Tech from Indian Institute of Technology (IIT)
Mumbai with Masters and Doctorate from an Ivy League University—Columbia University, New York.
• Served as Professor and research faculty at IIT Kharagpur and University of California.
• Over 20 years of experience in research, strategy and operations in various CxO-level roles. He has been involved with several IPOs, private placements, and M&A transactions.
• Capabilities lie in strategic value creation by understanding the interplay of valuation drivers and sources of risk through in-depth research and analytics.
• Co-authored a book on Corporate Governance in the context of Sarbanes-Oxley.
• Holds a value-oriented investment philosophy, which emphasizes “margin of safety” to minimize risks before focusing on maximizing returns.
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Mr. Lalit Kant (Head- Real Estate)• Post-graduate from the Delhi School of Economics and a
Certified Associate of the Indian Institute of Bankers.• Over 32 years of experience in the banking industry.• Initial years with SBI at various centres and was
associated with product development at the Corporate Centre.
• Worked with Siam Commercial Bank, PCL, (a leading bank of Thailand) for over 16 years; served as General Manager and Country Head, India.
Executive Committee
Mr. Lokanathan Nadar (Head- Infrastructure and Agriculture)• Chartered Accountant and Company Secretary with
over 12 years of experience in the infrastructure sector.• Worked as CEO of Pavana Multi Product SEZ (Township
Developers India Ltd) and Infrastructure initiatives of Wadhawan Mega Infrastructure Pvt. Ltd.
• COO of Sterling Multi Product SEZ. Headed Infrastructure initiatives of the group while supporting regulatory & environmental clearances for Sterling Dahej Port.
• Worked with Infrastructure Leasing & Financial Services (IL&FS) Part of the advising team for Government and private sector for core Infrastructure such as SEZ, power, industrial development, roads & transportation.
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Mrs. Jyothi Prasad (Head- Private Equity and Debt)• An alumna of Indian Institute of Management,
Ahmedabad (IIMA) and London School of Economics (LSE).
• Over 24 years of investment banking experience in India with SBI Capital Markets, Peregrine Capital and NM Rothschild and American Orient Capital.
• Extensive experience in origination and execution of a wide spectrum of fund-raising and advisory transactions with MNCs, large Indian corporates and SMEs.
• Fund-raising includes private placement of equity, term debt and working capital-raising.
• Capital market capabilities include advice and assistance on IPO, rights and takeover code transactions.
• Advisory experience includes valuations, M&As, sell-offs and capital restructuring.
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Disclaimer
• This Corporate Profile cannot be copied and/or disseminated in any manner. This communication is for general information purpose only, without regard to specific objectives, financial situations and needs of any particular person.
• This document is neither a prospectus nor any invitation to subscribe to the units of Fund and the schemes floated by the Fund. Nothing in this document is intended to constitute legal, tax, securities or investment advice, or opinion regarding the appropriateness of any investment, or a solicitation for any product or service. Nothing in this document is to be construed as an invitation for solicitation or collection of funds, which will be raised by way of a private placement memorandum. The information herein is subject to change without notice. Each prospective investor is advised to consult its advisors about the particular consequences to it of an investment in the schemes floated by the Fund. Neither the Fund nor any of its officers or employees accept any liability whatsoever for any direct or consequential loss arising from any use of this publication or its contents.
• No representation or warranty, expressed or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions contained herein. The information contained in this Corporate Profile is only current as of its date.
• Certain information in the document is based on information collected from sources considered to be reliable, however, the accuracy of such an information cannot be guaranteed and further such information may be complete and condensed. No liability is assumed for relevance, accuracy or completeness of the content of this Corporate Profile.
• This Corporate Profile is subject to the more detailed information specified in the Fund Document (as defined in the Private Placement Memorandum of the Fund) available only on request and investor may read and agree to the contents of the Fund Document, including all risk highlighted therein, prior to making any investment related decisions. Before making an investment, each potential should make its independent assessment and enquiries.
• The Company may alter, modify or otherwise change in any manner the content of this Corporate Profile, without obligation to notify any person of such revision or changes. No part of this material shall be copied or duplicated in any form by any means, or redistributed
• Copyright of Corporate Profile solely and exclusively belongs to ArthVeda Fund Management Pvt. Ltd., and regardless of the purpose, any reproduction and/or use of this Corporate Profile in any shape or form without the prior written consent of ArthVeda Fund Management Pvt. Ltd. is strictly prohibited.
ArthVeda Fund Management Pvt. Ltd.Ground Floor, HDIL Towers, Anant Kanekar Marg, Bandra
(E),Mumbai 400051, Maharashtra, India
Contact no.: +91 22 67748500; Fax: +91 22 67748585www.arthveda.co.in
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