India: Northern Arc Hits First Close of Latest Debt Fund at $23m

Mar 2020
India, March, 09 2020 - The Northern Arc India Impact Fund targets to make 15-20 investments with average deal sizes ranging from $3-5 million across its focus sectors including microfinance, small business finance, vehicle finance and agri-business finance.

Northern Arc Investments, the alternative investment arm of Northern Arc Capital, Monday announced the first close of its latest debt fund at $23 million.

The fund – Northern Arc India Impact Fund – is targeting to raise a total of $100 million, which includes a greenshoe option of $50 million.

The current fund marks a significant departure from its predecessors as this is the firm’s first vehicle targeting international investors, Northern Arc said in a statement.

Key investors in the first close included PG Impact Investments, a leading global impact investment firm backed by global private markets investment manager Partners Group, the Netherlands-based Anthos Fund and Asset Management, and Calvert Impact Capital, an institutional impact investor based in the US, it said.

“Risk adjusted credit spreads in the financial services space are very attractive and we are aiming to invest well over Rs. 1,000 crore of long term capital to financial institutions over the near term, especially those focusing on the under-served and under-penetrated segments in India,” Ravi Vukkadala, CEO – Northern Arc Investments, said.

The fund will invest in a number of debt instruments including senior and subordinated debentures, commercial papers, and other permissible market instruments in the the next five years, the statement said.

Over the next 12-18 months, the fund targets to make 15-20 investments with average deal sizes ranging from $3-5 million across its focus sectors including, microfinance, small business finance, vehicle finance and agri-business finance, it added.

“With an increased necessity by the impact investment community to ensure that investments are truly impactful, the focused and demonstrable outcomes that the fund expects to address in line with the SDGs is a much-needed boost to address some of India’s most pressing social and economic challenges,” Dimple Sahni, Managing Director, Anthos Fund & Asset Management said.

Established in 2014, Northern Arc Investments manages over $260 million across seven debt alternative investment funds.

Source : DealStreetAsia

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