Funds managed
| Fund name | Asset Class | License |
| Blue Lotus Multi-Bagger fund | PIPE( SME) | SEBI AIF Cat 3 |
About the AMC
- Blue Lotus Capital (BLC) is an investment management and advisory firm which manages and advises various funds (PIPE ) Funds and Private Equity (PE) strategies.
- Current Funds manage and advise by BLC – SEBI registered AIF (BLC Multi Bagger Fund ) , 2 Mauritius based FPIs ( India Multi Bagger Fund-IMBF and India Emerging Giants Fund-IEGF ) and a Cayman based Fund of Funds (Access World Fund- AWF) which invest in Global assets.
- Both Offshore Funds focuses in investing in small and mid cap listed indian companies. AWF invests in Global Asset Managers based in US & UK .
- BLC serves investors across the globe with the primary aim of generating superior returns leveraging its proprietary investment processes. The firm’s strategy combines deep industry expertise and local market experience with focus on a long-term investment.
It manages and advises a SEBI-registered Alternate Investment Fund (AIF), a Mauritius-based FPI fund and various family offices in Private Investment in Public Enterprises (PIPE) and Private Equity (PE) strategies.(nothing mentioned about specific funds on the website)
https://www.linkedin.com/company/blue-lotus-capital/about/
- Started by S Harikrishnan
- Key staff- S Harikrishnan, founder and partner (prior work ex-Managing Director & Partner of Avigo Capital’s India dedicated PE fund,
Nitin goyal, Partner (prior work ex – managing fund at Avigo graduate from IIM Lucknow and IIT Kharagpur, and holds a Masters from Stanford GSB),
Sankar Rao Mahamkali, Head of Compliance & Risk
Investment Philosophy (for firm)
Investing in the business rather than in the stock
Independence-Objectivity and rationality are essential qualities for independence of thought. Mimicking others only leads to regression to the mean. Independent focused research is the bedrock to our investment process.
Intellectual Humility-Acknowledgment of what one does not know is essential for drawing of wisdom. BLC seeks to expand and uncover competence of business by consulting and conversing with eminent sector experts. Third party validation is fundamental to counter biases and uncover further Insights.
Decisiveness and Focus-Key to success is to act in a decisive manner when the proper circumstances present themselves. Decisiveness and Focus means not to allocate capital on the 25th best idea but have the gumption to back your best conviction. That leads to focused Concentration towards the best work.
Patience- Resisting natural human bias to act is critical to long term wealth creation. Unleashing compounding and reducing unnecessary transaction cost is our goal.This would lead to low churn.
Process
Business Selection
BLC uses proprietary bottom-up stock selection approach called SLoPE to build its portfolio. We believe that a great firm performs significantly better than an average firm on a variety of measures, but most importantly by showing a consistent and calibrated approach to significantly better than an average firm on a variety of measures. We seek to evaluate each opportunity as a business analyst and not as a market or macroeconomic or security analyst.
Due Diligence
BLC undertakes thorough due diligence on the potential investment once it has passed on all the parameters of the SLoPE architecture. BLC adopts a 3-step due diligence process for every potential investment in order to satiate identifiable concerns and also negate any personal biases.
Decision Making Process
BLC has incorporated the PRIDE model as part of its decision making process. The objective of the model is to clearly define each entity’s role and distinctly outline the flow of information thus creating a formalized and participatory approach towards decision making.
Monitoring Framework
As part of HAWK monitoring framework, BLC will continually seek inputs from industry advisors, suppliers, customers and competitors of our investments, track operational and financial performance to keep a tight vigil on the investments.
Exit Framework
BLC follows a disciplined disinvestment process which would be based on business triggers, fundamental changes in the Company or Sector, targeted return or a combination of various macro changes in the Industry or Company. Over-arching aim for conducting such rigorous due-diligence at the time of investment and continuous tracking during the course of investment is to exit the investment with a superior return.
Risk Management
Risk management and capital protection is the bedrock of all the frameworks developed by BLC. It would strive to generate a superior absolute return while minimizing avoidable and foreseeable risks in all the investments and preserving capital. One of the basic tenants of following these proprietary processes is to benefit from their in-built risk management tools. This allows viewing risk in a holistic and multi-dimensional manner, to understand and manage it better.
Corporate Governance
All the professionals involved with BLC in various capacities of Investment Manager, Investment Committee and Advisory Board are committed to a transparent and simple investment process. Ethics and integrity are the utmost important principles of the firm’s pursuit of investment management excellence.
Media
- Blue Lotus capital raises Rs 240 crore for PIPE funds (35million dollar)
Date-17/08/2018
Blue Lotus Capital, an asset management company focusing on private investments in public enterprises (PIPE) strategy, has raised Rs 240 crore for its Blue Lotus Capital Multibagger Fund, a senior company executive said. The fund had made its first close of Rs 110 crore in September 2017. The PIPE fund focuses on investing in listed small and medium enterprises (SME) with a market capitalization of up to Rs 5,000 crore. He said “We have raised capital from several institutional investors, fund of funds and a couple of large family offices from the Middle East. Some of the investors in the fund are Trans Atlantic Partners, Safra Sarasin, Vernalis Capital, Tamara Investment Holdings.” talking about this development, he said that the Blue Lotus Capital has raised the fund entirely from offshore investor. The fund has so far invested in four companies, including water control gates maker Jash Engineering Ltd, skincare chain Kaya Ltd, alloy wheels maker Enkei Wheels (India) Ltd and commercial vehicles maker SML Isuzu Ltd, he added. Blue Lotus Capital focuses on small- and mid-cap companies with business models designed to capitalize on the aspiring Indian middle class, said Harikrishnan. He said “Our investment thesis is that people today in India have access to certain kinds of products. The next step is that they will move from ‘needs’ to ‘wants’, basically, premium products. You are betting on the Indian consumer whose per-capita income is going to grow from $1,600-1,800 levels to $2,600-2,800 in the next four to five years. We are looking for companies that are catering to the aspirational wants of consumers.”
- Blue Lotus Capital fund raises $15 million
Date-19 Sep 2017
Blue Lotus Capital, an asset management company focusing on a private investments in public enterprises (PIPE) strategy, has raised $15 million for its second outing, the Blue Lotus Capital Multibagger Fund, a senior company executive said. The new fund will focus on investing in listed small and medium enterprises (SME). “This is India’s first SME-focused PIPE fund. We will look to invest $2-5 million in small- to mid-sized companies listed on NSE and BSE as well as the SME exchanges”, said Harikrishnan. The second fund has hit a first close of $15 million, which was raised entirely from domestic investors, Harikrishnan said. he domestic fund-raising saw participation from several family offices, primarily from south India, engaged in businesses such as technology and pharmaceuticals.
“We are targeting to raise $35 million in total for the fund. The remaining $20 million will be raised from offshore investors. The offshore component will be largely anchored by a European bank, along with equal amount of co-investors,” said Harikrishnan.
“We have created a completely process-driven approach from identifying companies to investing in them and working with them. We have a panel of operating partners, which comprises industry leaders who have been successful CEOs (chief executive officers) and business leaders, to actively guide the portfolio companies through growth and high-value exit strategies,” said Harikrishnan.
On the investment team, he has partnered with Prashant Patel, a value investor with over 22 years’ experience in capital markets. The combination of a private equity investor along with a public markets secondary investor is unique as other PIPE funds have largely been private equity spin-offs. The asset management firm’s first fund, a $20-million portfolio managed for a Chinese family office, doubled in two years. The strong performance of the Indian stock markets in the past three years on the back of strong liquidity flows, both foreign and domestic, has drawn interest from several private equity fund managers. In 2015, Gulpreet Kohli, former ChrysCapital managing director, raised a maiden $100-million fund—Mylen India Growth Capital—to invest in small and mid-cap listed firms.
Analyst questions
- Tell us about Blue Lotus Capital Multi-Bagger fund, is it open ended or close ended?
- How do you target investors, as no information is available on the public domain about the fund? What is the main source of marketing this product?
- Why do you invest in SME PIPE, what do you see in this segment? What is the vision/ motive behind choosing SME segment?
- How do you ensure due diligence while raising funds from Indian and offshore investors?
- How do you market your product in offshore market? Last time you raised funds from Middle East, are you targeting any other offshore market for next funding round?
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