BHARATAM REALTY FUND - I (BRF - I)
The Bharatam Realty Fund I LLC (“Fund” ) is an opportunistic private equity real estate fund registered in Mauritius. The Fund is incorporated as a private limited liability company, holds a Category 1 Global Business Licence, is authorised as a closed-end fund and is further categorised as a professional collective investment scheme by the FSC pursuant to the Mauritius Securities Act and regulations made thereunder in Mauritius. BRF-I shall have a limited life having a term of 6 (six) years from the Final Closing (the “Term”). The Board may extend the Term by 1 (one) year each up to a maximum of 1 (one) times, provided that a Special Resolution is passed by Investors in favour of such extension of the Term.
BRF-I shall invest in real estate projects in India in the development of townships, housing, built-up infrastructure and construction development projects (the “Target Sector” ) in India as per the FDI Policy and applicable Laws (discussed hereinafter in greater detail). The currency of investment in the Fund is denominated in United States Dollars (“USD” ). Investments by the Fund in SPVs (incorporated in India) may be made in the form of equity shares, compulsorily and mandatorily convertible preference shares, and compulsory and mandatorily convertible debentures, in accordance with applicable Laws respectively
Size
The Company, BRF-I intends to offer up to 50,000 Class A Shares to the Investors in order to have an aggregate Capital Commitment of USD 50 million. In the event that the Board decides to increase the target size of the aggregate Capital Commitment to USD 100 million, the Company shall offer up to 50,000 additional Class A Shares.
Advantages of Integrated Model
Fund Managers development arm, Autus Developers Private Limited shall provide development service on cost basis only
BRF-I Shall participate in entire value chain of returns
Fund has a term of only 6+1 years
Cash flows to the investors typically by 3rd year itself
Exits from investment is 100% control of BRF-I
Governance, Regulations And Transparency
Investment Management Company (IMC)
Aryavrat Fund Manager Pvt Limited, Mauritius is appointed as the IMC for the Fund and will act as the investment manager and provide services stipulated in the Investment Management Agreement.
Indian Advisor
The IMC has entered into a non-exclusive Advisory Agreement with Athamus Venture Management Pvt. Ltd, the Indian Advisor to provide the IMC with non-binding investment proposals, in accordance with the Investment Strategy and Guidelines. The Indian Advisor shall not have any authority to act or to enter into agreements for and on behalf of the IMC and/or Fund. The IMC can accept or reject investment proposals presented to it by the Indian Advisor at its sole and absolute.
Investment Committee
The IMC will constitute an Investment Committee that will have the overall responsibility for making any investment/divestment recommendation, delegated to it by the Fund in terms of the Investment Management Agreement.
The Investment Committee will recommend investment and disinvestment actions after considering the proposals / recommendations of the Investment Manager and submit them to Board of the Fund to decide. The decision of the Board of the Fund in relation to investments and / or divestments shall be final and binding.
Investment Focus
The Fund will focus on entry at early stage of construction and development of projects in real estate and land buy-out transactions and will also invest in companies on joint development basis with land owners.
The Fund will endeavor to invest in projects which offer a strong value proposition in the form of dominant or quick selling locations and plan developments that are in demand during the term of the Fund together with sustainable domestic or international competitive advantages.
INVESTMENT PROCESS
Deal Sourcing
A key contributor to the ability to generate deal flow is the management’s breadth and depth of industry relationships, Athamus Venture’s track record of engagement with investee companies and the strength of the team Athamus. The Fund’s extensive private equity experience as well as the management’s reach and relationships with industry participants will provide significant advantages in pursuing the investment strategy. Athamus Venture has, over the years, established a strong network with financial advisors and investment bankers, thereby providing it fast and first cut access to several opportunities across sectors. In addition to the above, the Fund also has access to an in-house team of business development professionals who are dedicated full-time towards sourcing market opportunities.
Due Diligence
The Fund will adopt and undertake a rigorous due diligence process and financial evaluation. The Investment Advisor’s significant experience in evaluating a number of deals over the past years has provided us insights on due diligence aspects which are specific to emerging sector economies. By virtue of its network of relationships, the Fund has preferential access to legal counsel, “Big Four” accounting firms, as well as other advisors to assist in identifying material risks and validating key assumptions. The Fund will engage experts to review key risk areas, including legal, tax, accounting, business, technical and operational matters. A detailed management due diligence will also be followed especially in management buyout cases to assess the capabilities, past performance and expertise of the management to provide fresh growth impetus to target investments.
Investment Advisory Committee Recommendation And Investment Committee Approval
After preliminary evaluation of deals, specific deal opportunities are discussed in regular meetings (pre Investment Advisory Committee approvals) by the investment teams. The primary objective of such discussions is to obtain preliminary feedback from the team regarding the deal as well as to seek approvals and guidance on specific issues e.g. structures, appetite for particular sector, management reputation, etc. The Investment Advisory Committee (a committee constituted at the level of the Indian Advisor) follows a rigorous screening test which tests the investment opportunity on a variety of parameters e.g. conformity with investment objective, specific business dynamics, cyclicality conditions, financial parameters, portfolio management strategy, capability of existing management of portfolio company, proposed exit strategy, etc. While the deal team makes an investment proposal to the Investment Advisory Committee, it is accompanied by detailed comments and review by the Chief Risk Officer of Indian Advisor, who provide an independent view on the investment opportunity. The Investment Advisory Committee accordingly puts forth recommendations to the Fund’s Investment Committee and Board for their approval.
Portfolio Management
The Fund seeks to invest in companies which are capable of acquiring land for development at early stage and true market price. Besides capital for growth, where required, the Fund will assist its Portfolio Companies in identifying, evaluating as well as managing the next growth wave e.g. making bolt-on acquisitions, brownfield expansions, strengthening management, accessing capital markets, etc. The Fund will actively monitor the performance of the Portfolio Companies and seeks to implement a detailed MIS report for each of its portfolio companies. In addition to the above, the Fund will have periodic portfolio review meetings, wherein the performance of the investment is discussed and reviewed in detail.
Divestment
The Fund’s exit strategy is to seek to time exits opportunistically using a mix of divestment strategies including IPOs, sale of projects, strategic sales etc. The Fund ensures that the exit, along with ensuring optimum returns for its investors, is also in the best interests of the Portfolio Company.