Northern Arc Investments announces IFMR FImpact Investment Fund closure

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April 07, 2021 8:06 AM

Northern Arc Investments on Tuesday announced the successful maturity and closure of IFMR FImpact Investment Fund, the first fund from its investment platform, and the very first private credit fund from India focused on the microfinance sector.

Markus said the transaction took over a year to culminate with the global health crisis throwing up multiple challenges.Markus said the transaction took over a year to culminate with the global health crisis throwing up multiple challenges.

Northern Arc Investments on Tuesday announced the successful maturity and closure of IFMR FImpact Investment Fund, the first fund from its investment platform, and the very first private credit fund from India focused on the microfinance sector. Launched in 2015, the fund raised Rs 100 crore in commitments from a strong investor base, including banks, insurance companies and HNIs.

The fund’s investment portfolio comprised 13 companies, which in turn disbursed over 10 million end-loans to the unbanked and underbanked segments in India. During its six-year tenure, the fund witnessed some very volatile phases in India’s financial history, including the government’s demonetisation drive in November 2016, the GST rollout in July 2017, the tightened liquidity conditions afflicting the financial services industry post the NBFC crisis in 2018-19 and the Covid-induced national lockdown in 2020.

Despite these significant external headwinds, the fund maintained excellent portfolio quality and delivered consistent cash-flow payouts to investors throughout its tenure, with no instances of shortfall or delay. Upon final maturity, the fund delivered net returns (pre-tax, post all other expenses) of over 15% (in the rupee terms) to its investors, well ahead of its target return of 13%.

Northern Arc Investments CEO Ravi Vukkadala said: “This is a very significant and satisfying milestone for us. This is our second consecutive timely exit from our investment platform in the last two years, reinforcing our track record as an experienced private credit fund manager from India. We are incredibly grateful for the faith reposed in us by our investors, who returned to partner with us across multiple funds, and we look forward to their continued support in the future.”

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