Venus Capital Management has launched the Venus India Structured Finance Fund, which invests in Venus India Asset-Finance Private Limited, a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India (RBI).
The NBFC provides direct loans to small and medium enterprises in India and their shareholders and promoters. This opportunity offers absolute returns that are uncorrelated to any indices and could be used as a risk reducer in investors’ portfolios.
The NBFC provides a medium, through which investors may participate in secured and unsecured lending to small and medium Indian companies and their shareholders and promoters. The objective is to preserve capital and generate current annual yields in INR of 15-18% without equity kickers. Venus believes that it can obtain a target return of 25-30% in INR with equity kickers. The NBFC’s fair market value has achieved a cumulative appreciation of 35.2% since inception in June 2013 through the end of 2014 (in USD) net of expenses, with an annualised standard deviation of 11.44% and Sharpe ratio of 2.19. In essence, the NBFC is taking half the risk of the Nifty index, which has an annualised standard deviation of 23.4% and Sharpe ratio of 0.78.
“At Venus Capital, we believe that this strategy has the best chance of producing private equity like returns with debt like risks in India”, says Vik Mehrotra, Founder and CEO of Venus Capital Management, Inc. “By thinking out of the box, Venus has always delivered unique strategies to its investors and has set itself apart from the crowd of long hedge fund managers for India.”
Venus Capital is well known for its low risk, high alpha approach for investing in India. The firm’s arbitrage strategies generated annualised returns of 8.06% between January 2003 through December 2013 with annualised standard deviation of 3.98% and a Sharpe ratio of 1.56.
Venus has global reach with local knowledge. Over its many years of presence in emerging markets, it has developed strong relationships with brokers, analysts, fund managers and independent investors, all of whom are invaluable in assisting Venus to identify, source, and analyse these opportunities. Venus has partnered with RP&C in London and the Goel family (of Dhampur Sugar) in India to enhance its worldwide presence with strong local relationships.
