Vivriti Asset Management (VAM), a part of Chennai-based Vivriti Group, has launched an asset-backed securitisation fund with investment from International Finance Corporation (IFC) and M&G Catalyst. The company said in a press release that Vivriti India Retail Asset Fund (VIRAF) will be the first asset-backed securitisation fund in the country.
It said that VIRAF has a term of 10 years with a targeted assets under management of $250 million and is domiciled in GIFT City, International Financial Services Centre.
IFC has already invested $30 million in VIRAF, managed by VAM and backed by a capital commitment of $75 million from M&G Catalyst, a global private assets strategy of international investment manager M&G Investment.
“The fund will focus on scaling investment in securitised debt securities with MSE-backed assets —predominantly micro-loans to MSEs, which will constitute about 90 per cent of the portfolio,” it added.
VAM is a performing-credit focused asset manager investing in debt issued by mid-sized enterprises. With commitments of $400 million across eight funds, VAM managed funds that have invested across infrastructure, energy, logistics, financials, SaaS and services businesses.
Vineet Sukumar, Founder and MD, Vivriti Asset Management, said according to its internal research, Indian asset-backed securitisation funds (ABS) have outperformed internationally better rated ones, which makes it a compelling opportunity for global investors. “M&G and IFC’s participation serves as a validation of the huge and untapped potential of Indian ABS as an asset class,” he added.
An IFC study estimates the MSME finance gap in India is $342 billion, with MSEs accounting for 95 per cent of that gap.
Allen Forlemu, IFC’s Regional Industry Director for Financial Institutions Group, Asia and the Pacific, said the funding will bolster India’s NBFCs and enable greater institutional funding to the MSE sector.