IFMR FImpact Investment Fund Brochure

Financial
Returns with
Social
Performance
Our Expertise
Financial Inclusion through

Impact Investments
The Fund has been assigned rating

of AA (AIF) by CARE Ratings*
IFMR Investment Managers Private
Limited has been rated AMC 2 by
ICRA Limited**
IFMR Investment Adviser Services
Private Limited is registered with
SEBI as an Investment Adviser
Strong proprietary underwriting and
social performance guidelines for
the microfinance sector.
*The fund rating denotes that the asset selection
ability and asset management capabilities in the
respective segments for this Scheme is expected to
be good
**The fund management quality rating denotes
high assurance on management quality
IFMR
FImpact
Investment
Fund
Our Groups mission is to ensure that every

individual and every enterprise has complete
access to financial services.
For further information, please contact us at:

IFMR FImpact Investment Fund
th
10 Floor Phase I, IITM Research Park
Kanagam Village, Taramani,
Chennai 600113
Board: +91 44 6668 7000
[email protected]
http://investments.ifmr.co.in
This document neither constitutes an offer or an invitation to

offer, or solicitation or a recommendation to enter into any
transaction nor does it constitute any prediction of likely future
movements in rates or prices. IFMR Trust or its group
companies (We) have sent you this document, in its capacity
as a potential counterparty acting at arms length, for purposes
of discussion only. We are not acting in any way as an adviser or
in a fiduciary capacity. We therefore strongly suggest that
recipients seek their own independent advice in relation to any
investment, financial, legal, tax, accounting or regulatory issues
discussed herein. Analyses and opinions contained herein may be
based on assumptions that if altered can change the analyses or
opinions expressed. This communication is provided for
information purposes only. It is not an offer to sell, or a
solicitation of an offer to buy, any security, nor to enter into any
agreement or contract with IFMR Trust or its group companies.
In addition, because this communication is a summary only it
may not contain all material terms, and therefore this
communication in and of itself should not form the basis for any
investment decision. The risk and suitability of the Fund can be
assessed through the below colour coding.
Investors understand that their principal will be at low
risk
Investors understand that their principal will be at
medium risk
Investors understand that their principal will be at high
risk
#A
Scheme of IFMR Finance for Freedom Social Venture

Fund, registered with SEBI as a Category I Social Venture
Fund vide registration no. 12674863 dated June 2, 2014
About
Investment Strategy
The Fund is registered as a Scheme of IFMR Finance for

Freedom Social Venture Fund; a Category I Social
Venture Fund with an exclusive focus on microfinance,
registered with SEBI under SEBI (AIF) Regulations, 2012
with SBICAP Trustee Company Limited as the Trustee.
Focus on missing middle

Screening
The broad objective of the Fund is to promote financial

inclusion in India by facilitating development of the
Indian microfinance sector. The Fund seeks to achieve
this by investing in various securities of Microfinance
Institutions (MFIs) and its underlying assets.
Market Opportunity
Development of
bond market
Market
Opportunity
Bank
Funding
Short term
Investment Objective
Senior
Secured
debt
Medium-Long term
Senior
Secured
debt
Sub debt
Long term
Hybrid/
Equity
Capital
Focused investment strategy

i. Enable funding to first time borrowers
ii. Provide senior secured and subordinated debt in the
form of non-convertible debentures (NCDs)
iii. Provide an viable alternative to the current sources
of financing
iv. Fill an important gap in the capital structure for
MFIs by providing medium to long term debt
Target Returns
Rs. 50 crore with a green shoe

option of Rs.50 crore
Minimum of Rs.1 crore and
multiple of Rs.25 lakhs
IRR 13-14% p.a.*
Tenure
6 years close ended
Payouts
Quarterly surplus payouts
Management Fees
1% p.a.
Upfront Fee
0.5 to 1.5% (one-time) for setup
Recurring Expenses
At actuals
Proposed Size
Investment Amount
Diversification in
funding sources
Enabling financial inclusion Though microfinance

has made steady progress, India still has a significant
population where formal source of credit is yet to reach.
Catalysing development of debt capital market
MFIs are predominantly dependent on bilateral sources of
funding which are seasonal as they are linked to priority
sector lending.
Diversification of funding source Short term debt
and securitisation being the primary source of funds to
MFIs is predominantly linked with priority sector lending.
Going beyond short term funding The funding
sources for MFIs is concentrated on the shorter tenure.
* Returns are indicative and net of proposed expenses and fees
Fund Suitability
This product is suitable for investors who are seeking:
Regular income over the tenure of the Fund
Income by investing in a portfolio of fixed income
securities of varying credit risk
Medium risk
Investors should consult their financial advisers if in
doubt about whether the product is suitable for them
Medium risk
Due Diligence &

Appraisal
Maturity/Exit
Key Terms
Financial
Inclusion
Going beyond short
term funding
Investment Process
Post Investment
Monitoring
Investment
Recommendation
Investment
Decision
Underwriting Guidelines
The underwriting guidelines are based broadly on the
following five pillars, on which every potential investee
company will be assessed
Governance, Legal & Regulatory Compliance
Leadership, Management Quality & Systems
Financial & Operational Performance
Strategy & Business Plan
Social Performance & ESG
Social Performance Assessment
Every potential investee company is assessed using the
proprietary Social Performance Assessment (SPA)
Methodology at the time of investment and periodic
intervals during the tenure of the Fund
Post Investment Monitoring
Post the investment, the investee company is continuously
monitored through regular reporting, management
discussions and field visits.

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Financial

Financial Inclusion through

The Fund has been assigned rating

Our Groups mission is to ensure that every

For further information, please contact us at:

This document neither constitutes an offer or an invitation to

Scheme of IFMR Finance for Freedom Social Venture

The Fund is registered as a Scheme of IFMR Finance for

Focus on missing middle

The broad objective of the Fund is to promote financial

Focused investment strategy

Rs. 50 crore with a green shoe

6 years close ended

Quarterly surplus payouts

0.5 to 1.5% (one-time) for setup

Enabling financial inclusion Though microfinance

* Returns are indicative and net of proposed expenses and fees

Due Diligence &

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