MICROCAPITAL BRIEF: IFMR of India Receives Approval to Launch “FImpact Investment Fund”

The Securities and Exchange Board of India (SEBI) has approved the launch of the “IFMR FImpact Investment Fund” (IFMR FImpact), a social-venture scheme managed by IFMR Investment Managers Private Limited (IFMR Investments), the asset management arm of the Chennai-based, nonprofit IFMR Trust Group. IFMR FImpact will provide “long-term” funding to microfinance institutions (MFIs) in India in the form of senior and subordinated debt instruments.

Ms Sucharita Mukherjee, the Vice Chairperson of IFMR Trust and Chairperson of IFMR Investments, said that “the SEBI approval is a significant step forward for our venture into asset management. This Fund is the first in the series of funds that we plan to launch in financial inclusion. Our subsequent funds will focus on other retail asset classes such as affordable housing and small enterprise financing, furthering our Group’s mission of ensuring complete financial access to every individual and every enterprise”[1].

IFMR FImpact is the first alternative investment fund (AIF) in India that holds a fund rating. Its “CARE AA (AIF)” rating awarded by CARE Ratings, a credit rating agency owned by domestic banks and financial institutions in India, asserts that IFMR FImpact’s asset selection ability and asset management capability are “good”[1]. The “AA” rating constitutes the second highest rating for long- and medium-term debt instruments. IFMR Investments has also obtained a “fund management quality rating” as the first alternative fund manager in India: its rating of “Asset Management Company (AMC) 2” from ICRA Limited, another credit rating agency in India, suggests that IFMR Investments provides “high assurance on management quality”[1]. The “AMC 2” rating is the second highest rank on a five-step scale used by ICRA Limited to describe the quality of the management quality of funds.

Established in 2006, the Chennai-based IFMR Trust is a nonprofit organization in India. IFMR Trust reported total assets of INR 1.5 billion (USD 25.5 billion) as of March 31, 2013. Incorporated in February 2014, IFMR Investments holds total assets of INR 14 million (USD 235,000). IFMR FImpact is scheduled to be launched on June 25, 2014, at the Imperial Hall of the Palladium Hotel in Mumbai, India.

By Alíz Crowley, Research Associate

About IFMR Trust Group (IFMR Trust)

Established in 2006, Institute for Financial Management and Research Trust (IFMR Trust) is a nonprofit organization in India. Its mission is to “ensure that every individual and every enterprise has complete access to financial services.” As of March 2013, IFMR Trust carries out its mission through the following companies acquired or incubated by the Trust: IFMR Capital Finance Private Limited (IFMR Capital); IFMR Rural Finance Services Private Limited (IFMR Rural Finance); IFMR Finance Foundation; IFMR Mezzanine Finance Private Limited (IFMR Mezzanine); IFMR Rural Channels and Services Private Limited (IRCS); IFMR Advisory Services Private Limited (IFMR Advisory) and Pudhuaaru Financial Services Private Limited (PFSPL). As of February 2014, IFMR Investment Managers Private Limited was incorporated as an additional member of IFMR Trust. As of March 31, 2013, IFMR Trust reported total assets of INR 1.5 billion (USD 25.5 billion).

About IFMR Investment Managers Private Limited (IFMR Investments)

Incorporated in February 2014, IFMR Investment Managers Private Limited (IFMR Investments) is the asset management arm of the nonprofit, Chennai-based IFMR Trust Group. The company’s objective is to promote and manage investment funds that offer funding to organizations that serve people who had previously depended on informal financial channels. As of March 31, 2014, the total assets held by IFMR Investments amount to INR 14 million (USD 235,000).

About IFMR FImpact Investment Fund (IFMR FImpact)

The IFMR FImpact Investment Fund (IFMR FImpact) is an alternative investment fund registered with the Securities and Exchange Board of India (SEBI). IFMR FImpact will seek to provide “long-term” funding to microfinance institutions (MFIs) and other social ventures in India in the form of senior and subordinated debt instruments. IFMR FImpact is scheduled to be launched on June 25, 2014 at the Imperial Hall of the Palladium Hotel in Mumbai, India.

Sources and Additional Resources

[1] IFMR Website, IFMR Investment Managers Receives SEBI Approval for its First Alternative Investment Fund

MicroCapital, June 29, 2011, IFMR Trust, Manipal Education and Medical Group (MEMG) Join Government of India’s Rashtriya Swasthya Bima Yojana (RSBY) Health Microinsurance Program

MicroCapital, September 8, 2009, India-Based IFMR Trust ‘Debunks’ Myths About The Poor And Financial Services In The Wall Street Journal

MicroCapital, July 25, 2008, ICICI Foundation, IFMR Trust and CRISIL to Develop Rating Standards for Microfinance Institutions (MFIs) in India

MicroCapital Universe Profile: IFMR Trust Group

MicroCapital Universe Profile: IFMR Investment Managers Private Limited

MicroCapital Universe Profile: IFMR FImpact Investment Fund

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