Finvolve Pre-ipo Fund Deck

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Finvolve Pre-IPO Fund Deck

Finvolve stands as the biggest B2B network for startup investments. It is a joint venture between India Accelerator and Finolutions. India Accelerator is a leader in helping startups grow. With support from the Global Accelerator Network, it has boosted more than 200 startups since 2017. Recognized as the ‘Best Accelerator in India’ at the prestigious Startup India Awards, it continues to support startups, to understand their full potential for growth.

On the other hand, Finolutions, a B2B firm based in GIFT City, brings a unique set of expertise to the table. They specialize in providing comprehensive business consultancy for independent financial advisors, wealth managers, and financial firms. Their deep understanding of the market empowers financial product manufacturers with invaluable insights, distribution strategies, and extensive reach. Their diverse offerings, including PMS, AIF, Global products, and pivotal startup investments, are a testament to their comprehensive support.

Fund Terms

Fund Name: IA Growth Opportunities Fund

Category / Regulations: SEBI Category II AIF

Term of the fund: Five years from the first close

Fund theme: Sector-agnostic pre-IPO fund

Target Fund Size: INR 30 Cr

Minimum Investment: INR 1 Cr (to be paid in 4 tranches in 12 months)

Set-up Fee: One-time cost of 2%

Management Fee: 2% p.a  

Hurdle Rate: 12% annualised

Carry: 20% on profits with catchup (applicable after the return of capital)

Target Portfolio diversification: 5-7 companies

Investment Manager & Sponsor: Finvolve Ventures Private Limited

Why invest in pre-IPO Funds?

  • The pre-IPO market is a unique investment segment targeting companies poised for public listing.

Key Features of pre-IPO Funds

  1. The pre-IPO market is a unique investment segment targeting companies poised for public listing
  2. These businesses are typically in their final stages of growth before an IPO, offering investors the opportunity to buy equity stakes at valuations significantly lower than post-IPO prices
  3. This phase of investment captures the substantial upside potential as companies transition to public markets, combining the growth characteristics of private equity with the liquidity of public markets
  4. According to recent data, the IPO Index has outperformed the Nifty 50 by approximately 9% over the last ten years.

Advantages of Investing in pre-IPO Funds

Balanced Risk-Reward Profile: A balanced risk-reward profile provides a middle path between risky investments in early-stage companies and lower-reward stocks after they go public. In the last ten years, investments made before companies go public have consistently performed better than the overall stock market. Specifically, the index tracking these pre-public investments has shown around 9% better performance compared to India’s Nifty50 index.

Influence and Growth Potential: Before a company goes public, investors have the opportunity to influence important decisions and help the company grow. Historical data indicates that companies receiving investments before their IPOs have typically seen returns ranging from 25% to 40%. At Finvolve, they take an active role by offering guidance and support to enhance the growth of these companies.

Attractive Valuations: Investors can buy shares at prices much lower than what they would pay after the company goes public. This opportunity also includes the chance to buy shares from existing shareholders. This investment phase offers the potential for significant profit as companies move towards becoming publicly traded.

Liquidity Opportunities: Moving to public markets offers liquidity, letting investors sell shares for profit once trading starts. Historical performance of pre-IPO funds shows that an INR 100 Crores investment could potentially grow to INR 371.3 Crores in 5 years, assuming a 30% annual return.

Who can Invest?

  1. High Net Worth Individuals (HNIs): Individuals with substantial wealth, as defined by SEBI.
  2. Institutional Investors: Entities such as banks, financial institutions, insurance companies, and pension funds.
  3. Family Offices: Offices managing the wealth of affluent families.
  4. Corporate Entities: Companies, trusts, partnership firms, LLPs, and other corporate bodies.
  5. Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs): NRIs and OCIs are subject to specific conditions and regulatory approvals.
  6. Foreign Portfolio Investors (FPIs): FPIs registered with SEBI.

FAQ:

What is the target size of Finvolve's IA Growth Opportunities Fund?

The fund aims for an INR 30 crore target size, focusing on sector-agnostic pre-IPO investments.

How does Finvolve manage risk in its IA Growth Opportunities Fund?

Finvolve mitigates risk by investing in market-leading companies with strong financial health and growth potential, backed by rigorous due diligence and strategic guidance.

What are the potential returns for investors in Finvolve's IA Growth Opportunities Fund?

Investors can potentially benefit from attractive valuations pre-IPO, aiming for profitable growth with financial stability and liquidity opportunities as companies transition to public market

Fund Manager

Ashish Bhatia – Co-Founder – Finvolve
Founder & CEO India Accelerator

Ashish is a highly experienced leader and strategist with over 25 years of leadership experience at well-known multinational corporations, followed by a successful stint helping to establish the startup ecosystem. He has given back to the startup ecosystem as a mentor, investor, and entrepreneur by sharing his extensive and dynamic expertise. His tactics and entrepreneurial spirit have enabled him to produce successful and original insights, as seen by his startup endeavours.

Apoorva Vora
Co-Founder – Finvolve
Founder & CEO – Finolutions LLP

Apoorva brings over two decades of experience in the financial services industry. He has experience in Sales, Distribution, Business Development, Portfolio Management, Wealth Management, Advisory, Research, and Product Management. He is also an EB-5 Verified professional.

Value Investment Approach based on fundamental principles

  1. Growth Opportunities in Underpenetrated Indian Sectors
    -Focus on sectors poised for growth due to low current market penetration, such as digital payments, healthcare, edtech, and renewable energy.
    -Sectors with clear and sustainable growth drivers over the next 5 YEARS, supported by trends like digitalization and urbanisation.
  2. Leadership in High Growth Industries
    -Investing in companies that are either market leaders or have a clear trajectory towards market leadership, leveraging strong brand recognition and competitive advantages.
    -These companies show growth rates higher than industry averages, indicating increasing market share and competitive advantages.
  3. Profitable Growth with Financial Stability
    -Prioritizing companies that show higher revenues and profitability growth compared to industry peers, reflecting robust financial performance.
    -Focusing on companies with proven unit economics and capital-efficient models.
  4. Strategic Rationale
    -Risk Management: Investing in market leaders and financially strong companies mitigates risks and enhances resilience to economic changes.
    -Opportunities in Growing Sectors: Investing in underpenetrated high-growth sectors with structural drivers offers significant potential for capital appreciation.

What pre-IPO Funds avoid?

    • Overestimated Company Valuation
    • Weak Financial Health
    • Insufficient Market Preparation
    • Poor Corporate Governance
    • Inadequate Risk Management
    • Lack of Scalability
    • Regulatory Non- Compliance
    • Inexperienced Management Team
    • Mega IPOs

Pre-IPO Investments: Benefits for Every Player

For Companies:
Support in positioning the IPO
Capital support for acquisitions/ de-leveraging
Leverage IA/FV ecosystem for expansion.

For Investors:
Institutional access to high-demand IPOs
Risk management
Reduced lock-in period
Exit optimization

For Fund:
Partial liquidity prior to IPO
Potential for Alpha (Excess Returns)
Early Exit Options
Reduce locked-in shares

Product - AMC Category AUM (in Cr.) Performance 1M 3M 6M 1Y 2Y 3Y 5Y 10Y SI

ASK India Select Portfolio

AMC Name: ASK Investment Managers Ltd Inc Date: 4-Jan-10
Multi Cap
(PMS)
2,808 Strategy 5.80 10.60 15.30 22.70 6.50 12.90 13.50 17.30 15.70
S&P BSE 500 8.00 12.40 18.50 26.50 15.20 20.40 17.60 16.10 12.80

ASK Indian Entrepreneur Portfolio

AMC Name: ASK Investment Managers Ltd Inc Date: 25-Jan-10
Multi Cap
(PMS)
18,959 Strategy 3.70 7.20 10.00 20.50 5.00 13.80 14.80 18.40 17.60
BSE 500-TRI 8.00 12.40 18.50 26.50 15.20 20.40 17.60 16.10 13.10

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Disclaimer: Investing Involves Risk. This document is for information purposes only and should not be viewed as a legal offering document or solicitation. Offers to invest in this fund are made only by the Discretionary Portfolio Management Services Agreement. Past performance does not guarantee future results and there is no assurance that the managed accounts will necessarily achieve their objectives. We do not guarantee any returns in the hand of investors not we take any sort of accountability for the performance of the scheme. The above-mentioned data is collected from the respected Fund house please verify the same at SEBI website.