Fund managed
| Fund name | Asset Class | License |
| Excedo Realty Fund – I | Real estate | SEBI AIF Cat 2 |
About
Athamus is a vertically integrated fund manager. It oversees India focused real estate funds investing at the land buy stage in end user driven micro markets of Tier 1 cities for superior returns. Investments are made into 100% held assets, which ensures capital protection.
The funds managed by Athamus are organized to ensure investors “hold” capital or asset equivalent or higher in value at all times. The funds strategically invest in end user driven micro markets are uniquely positioned to “reap” business returns from the entire value chain.
Key staff
Ashok Kinha – General Partner & Managing Director – He has been instrumental in management of funds and fund managers and real estate developers for over 20 years. He was chairing the risk functions in his last assignment with Azure Capital, in addition to heading legal, compliance functions. Previously he worked with fund managers like ICICI Venture, IREO (US based real estate fund).
Prashanth Koppula – General Partner & Managing Director – He is an experienced entrepreneur having founded and successfully grown technology and real estate development ventures. Prior to joining Athamus, he founded Shasta, to develop real estate, where apart from leading fund management he also held operational responsibility for land acquisition, approvals, construction development, legal, finance, marketing and sales.
Investment philosophy
The firm believes in an ‘Integrated Model‘, stating the advantages as –
- Fund Managers development arm, Autus Developers Private Limited shall provide development service on cost basis only
- ERF-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 ERF-I
Governance, regulations and transparency
- ERF-I Has to compile with SEBI AIF Regulation
- IL&FS Trust Company Limited in its capacity as trustee is the legal owner of ERF-I taking care of investors as fiduciary, acting as a watchdog of the Fund Managers.
- Independent Board: Athamus Venture Strives to keep its board independent by appointing 50% members.
- Independent Investment Committee: Fund Manager has consciously decided to keep 50% members of the Investment Committee of ERF-I to be independent of the Fund Manager to ensure transparency in decision making, monitoring and observance of Investment Management Agreement.
Investment Process
Deal Sourcing
The Fund’s 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. 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
The Investment Advisory Committee 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 an 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.
Fund details – EXCEDO REALTY FUND – I (ERF – I)
Excedo Realty Fund – I is a private equity real estate fund registered with the Securities and Exchange Board of India (SEBI). The Fund is set up by Athamus Venture as a Settlor in terms of an indenture of trust dated October 22, 2011.
ERF-I shall invest in real estate projects in India in the development of townships, housing, built-up infrastructure and construction development projects.
Size
While the proposed corpus of the Fund is Rs 450 Crores, follow on rounds of funding are envisaged to sustain the investment momentum, leading to an overall Fund size of 600 Crores, pursuant to a green shoe option of Rs. 150 Crores.
Media
Dated- January 16, 2018
Athamus Venture closed the first round of ₹20 crore into its domestic fund Excedo Realty Fund-I. The amount raised from domestic investors will be used for land buyouts, and to invest in portfolio companies, niche markets and growth cities.
Intend to raise a second round of ₹300-400 crore in the next 6-9 months. Cities such as Bengaluru, Pune, NCR and new capital region of Andhra Pradesh are primary targets for investments from land acquisition stage up.
The development arm of the company, Autus Developers, will be the preferred developer of the invested land parcels, and will not charge any fee for any project. Developers normally charge a fee for the overall project which is passed on to the customers and investors. This will ensure higher returns to our investors.
Excedo Realty Fund-I has identified 10 acres in Whitefield, Bengaluru, and 20 acres in NCR to develop villas within gated communities. The fund is considering two more residential investments in a 17 acres and 24 acres project area in Whitefield and a farmhouse project in NCR.
Athamus is backed by a team of professionals that have consolidated experience in investing, developing and exiting in more than 5,000 acres of development.
Analyst questions
- What is your investment philosophy?
- As developers normally charge a fee for the overall project, what is your motto behind not charging fees for any project?
- How do you manage challenges and risks at various investment stages?
Prepared by – Praseena Padmakaran, June 2021
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