InCred Growth Partners Fund – I

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Welcome to AIF & PMS Experts India Pvt. Ltd.

About Company

InCred Wealth is a subsidiary of the InCred Group.We want to be a premier Wealth Management firm for Indians worldwide. InCred Group has enjoyed tremendous success in a short period of time as a result of its customised loan and capital market services. Our goal at InCred Wealth is to provide worldwide standards of wealth and investment solutions while being firmly entrenched in our local Indian culture.
We think that a firm is only as good as its employees.
We put together a group of high-calibre, devoted individuals to provide our clients with a strong, well-aligned team of top-talented experts. Relationship Managers, Investment Managers, and Service Managers with years of experience in the Wealth Management and Private Banking Industry.We think that all of our decisions should be made with the client in mind.
To satisfy the different needs of our customers, we provide an end-to-end investment product suite that is based on extensive research, driven by technology, and delivered by a highly skilled workforce. Individuals have unique demands that alter in response to the changing investing landscape and developing personal needs. As a result, we have abandoned cookie-cutter solutions in favour of highly customised solutions that are tailored to our clients’ financial needs.

Fund Snapshot

Fund Structure Category II AIF
Tenure 7 years from the Initial Close (extendable by 1+1 year with requisite approvals)
Target Corpus INR 5 bn with a green-shoe option of INR 3 bn
Investment Strategy Primarily private companies in the consumer, financials, technology and enterprise services
Set up Fees (One Time) 1% of Capital Commitment (raised through placement agents)
Operating Expenses On actuals; estimated to be 0.75% p.a. during the Fund Tenure
Sponsor Commitment Up to INR 200 mn
Minimum Commitment Minimum subscription of INR 10 mn
Drawdown Over 2–3 years

Investment Strategy – The Core Elements

Status – Unlisted

6,000+ privately owned scaled assets compared with 1,500 publicly listed companies

Stake – Minority, small stakes with ease of liquidity

With an option to build up in later rounds

Stage – Growing Stars

Series B/C – high growth companies. Glowing Stars (Series D+ – established companies)

Sectors

Consumer, Financials, Technology, Enterprise/Others

Targets that have a dominant industry sway and are profitable atleast at CM3 level

Portfolio Construction by Stage – Indicative

Growing Stars – 50-75% of AUM

Primary or primary/secondary combination stakes in high growth stage companies

  • Series B/C
  • Lesser mortality risk
  • Growth to drive returns
  • Exit via secondaries

Glowing Stars – 25-50% of AUM

Secondary or opportunistic stakes in established companies at undemanding valuations

  • Series D onwards
  • Ability to command a premium in capital markets
  • Ease of liquidity via IPO or secondaries

Themes – High Conviction Calls

Consumer

  • India poised to become 3rd largest consumer market globally by 2025 – domestic consumption drives 62% of GDP
  • India’s per capita GDP crossed US$ 2,000 in 2019 – the tip off point when spending on discretionary items accelerates

IT Services

  • Massive thrust on digital transformation by enterprises – resultant growth in data services including analytics and data engineering
  • Cloud migration services as an industry is projected to grow at 25- 30% p.a.

Healthcare

  • India becomes world’s most populous nation – 60+ age bracket to increase in growth rate 
  • Technology will lead the transformation. Health tech market to grow at a ~40% CAGR to reach US$ 50 bn by 2033

Financial Services

  • Vastly underserved market – India’s private debt to GDP at ~55% remains 1/3rd of the global average. Significant gaps exist in both retail and wholesale lending
  • Yet, credit is the backbone for economic growth – multiplier on nominal GDP of ~1.5x 

Enterprise Tech

  • India has emerged as a global leader in SaaS, behind only the US 
  • Indian SaaS companies are expected to grow at 20-25% CAGR during 2022-27 with near doubling of their global market share

B2B Services

  • Indian B2B, a US$ 2 tn opportunity, is one of the largest and fastest growing B2B markets globally
  • Domestic PLI schemes, global supply chain realigning to China+1 will be significant growth drivers

Stage – Why prefer Series B/C?

  • Higher risk adjusted growth – Series B/C companies demonstrate more sustainable PMFs, with lower mortality risk even while offering higher growth
  • Sizeable TAM – annual deal value for this stage is similar to that for late stage (Series D+), thus enabling sizeable liquidity for entry and exit options

About The Fund Manager

Vivek Singla:Managing Partner & CIO

Vivek brings more than 18 years of investment experience. He was previously Principal – Avendus Future Leaders Fund, instrumental in building the fund since its beginning as well as consummating multiple investments and exits. Vivek has a PGDM from IIM Lucknow, a B.Tech & an M.Tech from IIT Delhi and is a CFA Charter holder.

Why are they also convinced about Late Stage?

Funding Winter 

  • Limited deal activity in late stage startups. 100mn+ mega-rounds dropped by half in volume
  • Mainly as most leaders are sitting on significant cash balance – runway for 2-3 years and don’t want to dilute at levels below par

Lack of Exits

  • IPOs for PE/VC backed companies get pushed out – exit via public markets dropped ~80% YoY in value and ~60% in volume
  • Secondary exits recorded drop 67% YoY drop in value and 45% in volume as buyers and sellers waited it out

Implications

  • Cap tables would come under pressure – Investors and shareholders would need liquidity
  • In time, opportunistic trades will increase and drive deal activity

Conviction Call 

  • Underlying business growth will continue. However, valuations are likely to be flat or trend downwards – implying correction in valuation multiples
  • In addition, growth at all costs leading way to profit after all costs – better companies at reasonable prices

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For any queries, contact us on Mobile: +91 95616 10108, Landline: 020-48627339,Toll Free: 1800 210 1995, Email: [email protected]     Whatsapp-logo

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.