Vivriti Short Term Bond Fund

Vivriti Short Term Bond Fund

Fund Snapshot

Fund Type Category II Debt AIF
Initial Closing Mar 2021
Fund Size INR 300 crores (including green-shoe option)
Fund Tenor 3 years from final close
Initial Close Mar 2021
Estimated Final Close Dec 2021
Fund Manager Soumendra Ghosh

About Fund Managers

Soumendra Ghosh:

  • Part of the founding member at Vivriti GroupSoumendra Ghosh VivitriChief Investment Officer at Vivriti AMC
  • 15 years of experience in structured finance, banking, and technology
  • Structured and closed over US$ 5 Bn of fixed-income deals in domestic and offshore markets

Unique Feature

  • Industry 1st AIF product which provides annual return of capital and quarterly coupon
  • Investing in well-regulated entities with healthy capitalization and high vintage
  • First loss protection available to senior tranche
  • The Senior tranche (i.e. Class A) is rated as CRISIL AA+ (SO) for capital protection available in Vivriti Short Term Bond Fund
  • No MTM or interest rate risk
  • Alpha of 500 bps + over traditional fixed income products

About the Product

  • First of its kind, short term (3 year tenor) fund which returns capital during the fund tenor along with quarterly coupon
  • The Senior tranche (i.e. Class A) is rated as CRISIL AA+ (SO) for capital protection available in Vivriti Short Term Bond Fund
  • The fund is structured for high safety with 4 levels of protection:
  • High regulated and priority sector for Govt & RBI; sectors that the team has tracked for over a decade
  • Investing in entities with strong Balance sheet, healthy capitalization and which have seen multiple crisis through including COVID
  • Structural protection through first loss protection offered to the Senior tranche
  • Reducing Exposure at Risk through regular return of capital and quarterly coupon payouts
  • Adjusted for this safety, the fund aims to return upto 500-800 bps alpha over a comparable AAA product for various tranches.

Why this product?

The fund is innovated structured:

  • The fund provides highly predictable principal cashflows and returns mitigating the illiquidity issues faced by other close-ended products.
  • Low correlation to other traditional fixed income and equity products, which makes it a good, diversified product from an asset allocation stand-point:
    • No interest rate risk or MTM risk as suffered by open-ended MF vehicles
    • Closed-ended structure ensures unitholders are not subjected to volatility and vagaries of fellow unitholders in the fund, thus avoiding liquidity run on the fund

 Underlying Portfolio:

  • Retail Financial Services
  • Investing in entities which are well capitalised, high vintage and have steered through multiple crises over the past decade and emerged successful

Investment Philosophy

  • The fund invests in senior debt issued by retail financial services companies core to economy, and expected to play a key role in revival out of COVID-induced slowdown
  • The fund invests in entities with proven track record of delivering financial services to individuals for income generation, and small enterprises. These firms have raised multiple rounds of private equity from marquee global & domestic investors or are backed by large, reputed groups

About Vivriti:

Vivriti Group was set up in 2017 to make debt markets efficient, transparent and add value to both issuers and investors alike by leveraging technology to discover, execute monitor debt investments.

It owns the largest technology-enabled debt marketplace in India – CredAvenue. The platform has multiproduct capability, state-of-the-art risk management, and allows for discovery, investment execution and post-investment fulfilment of debt transactions.

Vivriti AMC, part of Vivriti Group, manages closed-ended fixed income alternate investment funds (AIFs) that raise domestic and global capital to invest into sectors of the group’s focus through CredAvenue. Vivriti AMC has pioneered debt AIF in India with many industry firsts to its credit.