Alternate Investment Fund
Why SME Fund:
SMEs are often the backbone of economies, especially in developing countries. They contribute significantly to GDP (e.g., in the U.S., SMEs account for about 44% of economic activity, per the SBA). They drive innovation, create jobs, and stimulate local markets.
SMEs contribute approximately 30% to India’s GDP and account for nearly 45% of the country’s industrial output. They are critical drivers of economic growth, especially in a developing economy like India. SMEs are the second-largest employer in India after agriculture, providing jobs to over 120 million people.
SMEs contribute about 50% of India’s total exports, with key sectors including textiles, handicrafts, and engineering goods. As India strengthens its position in global trade, SMEs are poised to benefit from increasing demand.
With over 57 million MSMEs (Micro, Small, and Medium Enterprises) registered in India as on dec 2024, they form the backbone of the industrial and service sectors, supporting both urban and rural economies.
The Indian government has introduced several initiatives to bolster SMEs, such as the Make in India campaign, Atmanirbhar Bharat (Self-Reliant India), and schemes like the PMEGP (Prime Minister’s Employment Generation Programme) and MUDRA loans.
Tax benefits, subsidies, and easier access to credit make SMEs an attractive investment option, reducing financial risk for investors.
Smaller companies can pivot quickly, adapting to market changes faster than large corporations. They’re often where disruptive ideas emerge—think tech startups or niche manufacturers.
For investors, SMEs offer a way to diversify a portfolio. While they carry higher risk than blue-chip stocks, they also have potential for outsized returns, especially if you catch a growing business early.
Governments offer incentives (tax breaks, grants) to encourage SME investment, reducing risk for investors.
Features of Money Plant Capital SME Fund
The Money Plant Capital SME Fund emerges as a standout choice among Alternative Investment Funds (AIFs), offering investors a compelling avenue for achieving robust returns in today’s dynamic market. This fund is driven by the exceptional expertise of its investment team, whose more than two & half decades of industry experience are complemented by a meticulously crafted and time-tested investment strategies.
What sets the Money Plant Capital SME Fund apart is its blend of innovation, adaptability, and disciplined risk management. The fund excels at spotting and seizing emerging market trends, swiftly adjusting to evolving conditions, and leveraging sophisticated tools to minimize downside risks. Its distinctive investment approach is further defined by a set of unique characteristics:
- Target Companies: Focuses on IPO-bound or listed companies particularly profitable SMEs in high-potential, unorganized sectors.
- Ideal Profile: Prioritizes businesses addressing scalable real-world challenges with upscaling potential of 3x to 5x within 5 to 6 years or more.
- Geographic Focus: Targets Tier II and Tier III cities, tapping into underserved yet promising markets.
- Key Sectors: Invests in successful, growing franchise models and companies with strong footholds in non-cyclical, niche markets fueled by resilient, long-term growth drivers.
- Financial Strength: Emphasizes cash-generating, low-capital-intensive businesses with strong profit margins and high returns on capital employed or equity.
- Business Attributes: Seeks firms with diverse, global customer bases; technical expertise or intellectual property; and essential, non-discretionary products/services with pricing power.
The fund’s allocation strategy is equally strategic: In SME AIF, a minimum investment of 75% has to be done, this investment has to be done in unlisted or proposed to be listed SME companies. While upto 25% toward all other segments entities, depending on market opportunities identified by the Investment Committee. Additionally, the fund retains flexibility to invest in companies incorporated outside India, as permitted under AIF regulations, at the discretion of its seasoned management team.
With its highly experienced investment committee head, forward-thinking approach, and focus on sustainable growth, the Money Plant Capital SME Fund offers a rare and attractive opportunity for discerning investors
Addressing Risk Management in AIF
Addressing the risks requires robust risk management strategies in AIF, which involves identifying, assessing, and mitigating risks. This is where the expertise of top fund management lies. We use diversified strategies to manage risk, such as:
- Diversification: Spreading investments across different asset classes, sectors, industries, and geographic regions. Purpose: Reduces the impact of poor performance in any single investment or sector on the overall Diversification spreads risk and enhances stability.
- Asset Allocation: Strategic distribution of investments among different asset classes (high beta, low beta & zero beta assets). Purpose: Balancing risk and return by adjusting the allocation based on market conditions and the investor’s risk tolerance. Proper asset allocation ensures the portfolio is not overly exposed to any single asset class.
- Stop-Loss Strategies: Setting predetermined price levels at which specific securities will be sold to limit losses. Purpose: Prevents significant losses in case a particular investment’s price falls below a certain threshold.
- Stress Testing: Evaluating the portfolio’s performance under various adverse scenarios (market crashes, economic downturns). Purpose: Helps portfolio managers assess how the portfolio might perform under extreme conditions and make necessary adjustments to mitigate potential losses.
- Liquidity Management: Ensuring that the portfolio maintains sufficient liquidity to meet investor redemptions and unexpected market Purpose: Avoids the need to sell illiquid assets at distressed prices, preserving the portfolio’s value during market downturns.
Knowing the types of risks and understanding the concept of risk and return can guide you in selecting the right AIF service in India, tailored to match your risk tolerance and investment objectives.
At Money Plant SME Investment Fund, we are cognizant of these risks associated with the asset class that we operate in. We have a very disciplined approach for portfolio construction and being value investors, all our investment decisions factor in a significant margin of safety. Our in house research team with their process driven approach analyses and monitors companies to identify and mitigate company specific risks including corporate governance concerns.
Investment Strategy:
The Money Plant SME Investment Fund adopts a sector-agnostic approach, casting a wide net to capture opportunities across technology-driven enterprises and broader consumption-driven themes. Its investment decisions hinge on a set of core criteria that ensure resilience and growth potential:
- Target Companies: Profitable, SME-listed firms with significant upside in unorganized, high-opportunity sectors.
- Fundamental Strength: Emphasis on solid business foundations and financial health.
- Governance Standards: Commitment to strong corporate governance practices.
- Leadership Quality: A deep, capable management team with a proven track record.
- Risk Buffer: Investments chosen with a built-in margin of safety to protect against volatility.
The fund strategically zeroes in on sectors poised for a rare blend of accelerated growth and enhanced profitability among their leading players, ensuring a balanced pursuit of opportunity and stability.
Investment Phylosophy
The Money Plant SME Investment Fund aims to make early investments in high-potential growth businesses that have a proven ability to generate revenue and a well-thought-out strategy for scaling. The fund focuses on SMEs eager to secure the resources—such as equipment, real estate, talent, and operational funds—needed to accelerate their expansion and maintain momentum over the long haul.
COMPANY TRAITS:
- Solid Foundation: A reliable and tested business framework.
- Dynamic Growth: Strong upward trajectory with significant potential.
- Market Dominance: Capacity to emerge as a leader in its niche.
- Lean Operations: Efficient use of capital for maximum impact.
MANAGEMENT STRENGTHS:
- Collaborative Mindset: A relationship-focused approach to partnerships.
- Unified Goals: Interests closely aligned with those of investors.
- Capable Leadership: A robust and skilled management team.
GOVERNANCE STANDARDS:
- Clarity: A dedication to openness in all dealings.
- Endurance: Practices designed for lasting success.
- Ethical Core: A deep-rooted commitment to compliance and integrity.
This strategy positions the fund to support businesses blending established success with ambitious, sustainable growth plans, underpinned by strong leadership and principled governance.
Investment Focus:
The Money Plant SME Investment Fund is tailored to deliver both growth capital and strategic guidance to SMEs unlisted & poised for listing on stock exchanges. By targeting companies with strong potential for expansion and profitability, the fund seeks to empower these enterprises to scale effectively and secure enduring success.
Investments from the Money Plant SME Investment Fund will be directed toward Indian companies in the manufacturing and services sectors, specifically within the following domains:
- Auto-Components: Businesses supporting automotive supply chains.
- Light and Medium Engineering: Firms driving innovation in engineering solutions.
- Pharma & Healthcare: Enterprises advancing medical and health-related offerings.
- Technology & Business Services: Companies leveraging tech for operational excellence.
- Chemicals: Players in the chemical production and application space.
- Logistics & Transportation: Entities optimizing the movement of goods and services.
- Energy Efficiency: Organizations focused on sustainable energy solutions.
- Electrical Equipment: Businesses developing essential electrical infrastructure.
This focused approach ensures the fund nurtures high-potential SMEs across key industries, fostering their growth and market readiness.
FAQs
The Money Plant SME Fund is created by Money Plant Capital Trust Category I Alternative Investment Fund (AIF) – SME Fund, registered with SEBI effective [Month Day], 2023, under registration number IN/AIF1/23-24/xxxx. Our fund is dedicated to raising capital from investors to invest in small and medium enterprises (SMEs), allocating units to investors in return for their contributions.
Our office addresses are:
Registered Office: K-37/A, Basement, near Kailash Colony Metro Station, Kailash Colony, New Delhi, Delhi 110048
Marketing office: 1st Floor, 824, Sector 14, Gurugram, Haryana – 400013. For contact, you can email us at info@artharich.in and for more details, please visit the contact us page by clicking here.
Money Plant SME Fund privately pools the investment from investors to invest majority in the unlisted & listed SME Companies as a single entity. Once the fund has invested money in a particular company, these company issues shares to our fund and the fund issues units to the investor. Therefore, it is the SME Fund which has a direct shareholding in the SME companies and not the Investor.
Our team is constantly evaluating SME companies. After understanding the business model and founder’s vision, we do legal and financial due diligence to make sure that the company has no red flags.
Once company is selected to be a part of investment portfolio and fund is allocated. The fund will issue units to the investors at a Net Asset Value in proportion to the amount invested and these units will be visible when you login to your Investor Portal.
Post your investment, we provide periodic key business updates and various financial metrics. We also provide a periodic unit statement and half yearly as well yearly valuation report of investments to all investors.
On timely intervals we will also be conducting Zoom meetings with promoters of SME companies where we are invested to discuss queries & their future growth plans. Investors can also join and send their questions that we can ask on their behalf.
Money Plant SME Fund aims to invest in companies that are in the early stages of their growth trajectory. We will aim to invest in businesses which are planning to list with future growth or already listed. By investing we will look to provide growth capital to companies which have already generated traction in the market along with revenues and validation.
We endeavour to create long-term relationships with all our stakeholders while practicing a disciplined approach to investment.
Also, these above points are general guidelines we follow and not strict rules. There could always be exceptional opportunities where we may use different Investment parameters.
We will strategically invest in a carefully curated portfolio of 10–20 companies that align with our specific parameters. Our approach avoids spreading capital across too many companies, ensuring we can effectively manage the portfolio even in uncertain conditions.
The Alternative Investment Fund shall accept from an investor, an investment of value
of one crore rupees or more.
The Alternative Investment Fund may raise funds from any investor whether Indian,
foreign or non-resident Indians by way of issue of units.
Please fill out the joining form. You can redirect to our joining form by clicking here. Our investor relations team will reach out to you.
-Documents Required for Onboarding
For Individuals – PAN Card, Aadhaar Card, Cancelled cheque
For Corporates – Please reach out to us on info@artharich.in and we will share the list of documents.
SME fund investing typically resides in the medium-to-high risk category, reflecting the vibrant volatility, liquidity dynamics, and inherent uncertainties that characterize smaller enterprises. Far from being “unsafe,” this asset class presents a compelling opportunity for those who value diligence and strategic oversight in managing risks. For investors with a strong capacity for risk and a focus on long-term growth, SME funds offer an attractive avenue to achieve robust returns, making them a potentially rewarding component of a well-considered portfolio.
Liquidity refers to how quickly and easily an investment can be converted into cash without significantly affecting its value.
SMEs require time to grow, scale, and become profitable enough for an exit (e.g., acquisition or IPO). The fund manager needs time to identify promising SMEs, invest, nurture them, and then exit profitably. This process often extends the horizon of 3 years or more.
SEBI requires a minimum of 3 years for close-ended Category I AIFs. However, SME-focused funds often have longer horizons—commonly 5 to 7 years.
Ready to Elevate Your Growth?
Join forces with Artharich Investment and step aboard on a journey of unparalleled growth and prosperity.
