- A unique private infrastructure fund dedicated to delivering clean hydrogen infrastructure projects at scale has been launched.
- This shall play a major role in the decarbonisation of the global economy.
- Hydrogen has the potential to make a substantial contribution to our clean energy transition, reducing emissions across the economy while underpinning the development of an important domestic and...
SFO US Growth Fund Investment Objective
- The US Growth Fund seeks to maximise total return. The Fund invests at least 70% of its total assets in the equity securities of companies domiciled in, or exercising the predominant part of their economic activity in, the US. Majorly the companies shall come from the following industrial belts in the USA. SFO also has relationships with 450 global exchanges to help companies with.
1. East North Central
2. East South Cetral
3. Mid Atlantic
5. The New England Regions
7. Puerto Rico & The Island Areas
8. South Atlantic
9. West North Central
10. West South Central
- The Fund places particular emphasis on companies in the following sectors that ( that employ the largest population in descending order Healthcare, Retail, Manufacturing, Eduction, Hospitality, Professional, Construction, Other Services, Government, Finance & Insurance, Administrative, Transportation, Wholesalers, Entertainment, Information, Real Estate, Agriculture, Utilities, Oil & Gas, Metals, Management), in the opinion of the Investment Adviser, exhibit growth investment characteristics, such as above-average growth rates in earnings or sales and high or improving returns on capital.
- SFO is also working on national, state and county level roadmaps to double the GDP and make macroeconomic factors based KPI for Better Governance. These inputs advice our investments.
- We adopt ESG, impact and sustainability measures while finalizing our portfolio.
- The fund seeks capital appreciation by investing predominantly in equity securities of companies that the investment manager believes offer compelling growth opportunities. The investment manager considers many factors in the selection criteria, including historical and potential growth in revenues and earnings, assessment of strength and quality of management, and determination of a company’s strategic positioning in its industry.
- The Portfolio seeks to provide capital growth over the longer term. The Portfolio will mostly hold shares or similar instruments relating to US companies. Such companies are either based in or earn most of their profits or revenues from the US. The Portfolio may also invest in companies which are based anywhere in the world.
- Market participants often underestimate the pace and duration of growth. We aim to add value with differentiated, long-term views and a focused portfolio of securities.
- We use bottom-up research to identify companies with compelling and sustainable growth trajectories whose current valuations don’t reflect our views of their long-term prospects. Our process emphasizes factors such as quality, market share, competitive positioning, and the evolution of innovation.
Reasons To Consider Investing
- Focused Portfolio — A focused portfolio of 30–40 high quality growth businesses that represents the team’s high conviction investment ideas and is based on our disciplined strategy.
- Rigorous Process — Secular growth drivers are carefully considered in the stock selection process, such as: advancing communications, global energy supply/demand imbalance, demographic trends, expanding global markets and technological advances in healthcare.
- Long-Term View — The strategic long-term growth capabilities of a business are evaluated rather than short-term factors, such as stock price, momentum, sector rotation, or current quarterly earnings.
- Access to a deep and experienced Team — The US Large/Mid Cap Team consists of over 20 investment professionals averaging 15 years of industry experience. Sector analysts conduct rigorous fundamental analysis to identify potential investment opportunities. Lead Portfolio Managers follow a centralized approach to decision-making and leverage the broader team for investment ideas.
SFO Stressed Assets Fund
- Globally macroeconomic troubles of various countries are attracting a new wave of global investors betting they can eke out profits from the rising number of capital-starved businesses struggling to stay afloat.
- Sensing opportunities from stalled companies and real estate projects and cash starved developers, Sekhon Family Office is launching an stressed assets funds.
- The proposed fund will focus on last-mile funding and acquisition of stressed companies, residential and commercial projects with an investment ticket size as below per transaction.
- Large Ticket Size (US$150m- 900m)
- Medium Ticket Size (US$50M- 150M)
- Small Ticket Size (US$15M- 50M)
- The fund will independently evaluate and invest in various stressed assets and will rely on the GP’s operational expertise to manage recapitalized businesses.
- The proposed fund has tied up with lenders in the identified assets hich inlcudes global heavyweights such as biggest sovereign funds, pension funds, university endowment funds and others of the like of KKR, AION Capital, Apollo Global Management Inc, New York-based Cerberus, Ares Management Corp.-backed SSG Capital Management, Singapore-based DBS Group Holdings Ltd, London-based Nithia Capital, Goldman Sachs Group Inc, Global investment firm Varde Partners LP, Mumbai-based Kotak Investment Advisors, CarVal Investors, Blackstone, Lone Star Funds, Brookfield Asset Management and Oaktree Capital Group and many others to scale up our teams in the country in a push to invest in distressed assets.
- Such an approach will be more acceptable to both lenders and borrowers in cases where the promoters are not able to infuse funds and lenders are reluctant to take additional exposure.
- The partnership will seek to tap the potential business opportunity offered by the growing pile of stressed corporate assets in India
- At a time when the banking sector is seeing a sharp increase in non-performing assets and with very few investors willing to buy these, such funds could help relieve banks of some of these loans. Collectively, the 14 asset reconstruction companies (ARCs) in India have a total capital of just R3,000 crore (approximately $450 million).
- Transactions have been few and far between primarily for two reasons: — ARCs need to pay 15% of the debt value upfront which they perceive is high and moreover, banks typically are reluctant to offload assets at lower valuations.
- In other words, they are not willing to take too much of a haircut. ARCs charge between 1.5% and 2% of the asset value as the annual management fee. However, not too many transactions have turned out to be profitable for them.
- The problem with ARCs is that they simply don’t have the money to meet capital adequacy requirement leave aside making upfront payments to banks and that’s exactly where the new fund comes in.
- The fund is an experiment where real estate developers will join hands with an asset management company at an early stage to create a better eco system of fund raising when liquidity support from major financial institutions and NBFCs has dried.
- Stressed assets acquisition being more of operational play promoters and real estate developers, as operating partners in the acquisition of stressed assets and last-mile funding, will provide a unique win-win investment opportunity to investors where operational risk is mitigated through active participation.
- This would better visibility of financial closure, execution and exits. The operating partners will invest in the fund and the projects to have proper skin in the project.
- Various funds have already pumped $1.5 billion in distressed assets in India this year, 55% more than through all of 2019. That data only captures deals that have closed and doesn’t includes others that have been recently announced such as Oaktree’s 22 billion rupee ($294 million) loan to lender Indiabulls Housing Finance Ltd. in July.
- India in recent months has struggled to control its coronavirus epidemic, reporting the largest number of infections after the U.S. and has suffered the worst economic contraction among major economies worldwide. Yet even before the pandemic, the country had been battling one of the world’s worst bad debt problems in its financial sector, which claimed a string of lenders and left banks reluctant to lend to the most vulnerable businesses.
- The international funds are now attempting to fill that void. In doing so they face a string of challenges including India’s complicated regulatory framework and tax laws, which often require intricately structured transactions. Deals often take long to close or even fall through. Yet many investors are betting that long-term factors will bring them returns.
- India’s economic growth, demographics and stressed assets will come together in the coming decade, giving investors an opportunity of a lifetime.
- Part of the attraction for the biggest global investors is the nature of the country’s nascent financial markets. While traditional banks were focused on cleaning up their piles of bad debt, shadow lenders stepped in to keep funds flowing. But the collapse of an infrastructure financier two years ago triggered a cash crunch that has slowed lending to businesses. Mutual funds dabbling in the riskier part of the credit market have also pulled back and Franklin Templeton earlier this year suffered the biggest ever forced closure of funds in India.
- Indian banks had the world’s worst bad loan ratio among major economies even before its strict lockdown began in March, throttling economic activity. The central bank now estimates soured assets will rise to an over two decade high of 12.5% by the end of March 2021, from 8.5% a year ago, a sign of the difficulties businesses face.
- India’s domestic financial market lacks the ability to fund the risk capital needed to resolve the stressed assets that result.
- India’s underlying economy remains supported by compelling demographic and economic growth trends, creating substantial opportunities for investors.
- We expect to see a significant wave of motivated sellers of high-quality assets, and in the medium to long term, deeper balance sheet restructurings.
- But despite the rush to invest, problems remain. Funds would still like to deploy more money in India for the right deals, but also sees obstacles. One of the critical ingredients missing in the Indian system is a pre-packaged insolvency, where existing lenders, sponsors, and new money get into a room and work out a deal, and the court then blesses it.
- The influx of foreign funds may also add to competitive intensity and squeeze returns.
- Yet, India’s cleansing of its financial system has a way to run, and there’s “a ton of opportunities left,. Probably we are not even halfway through it and the stress could get worse before it gets better.
Sekhon Family Office is also partnering with India’s efforts of a new category of alternate investment fund which will focus on acquiring stressed assets from banks and shadow lenders, a move aimed at resolving some of the highest bad debt in the world.
- The fund will be allowed to buy stressed assets directly from the banks and non-banking financial companies, people with knowledge of the matter said, asking not to be identified as the matter is not public. At present, investors can only access bad loans through securities issued by asset reconstruction companies, but the new fund category will allow them to do so directly. This will give foreign investors including global hedge funds easier access to the mountain of local bad debt.
- Prime Minister Narendra Modi has been spearheading efforts to kick-start the economy and a significant part of this is based on increased lending by the banks which opens up the risk of a further increase in bad debts due to the virus outbreak. Using an alternate investment fund to buy bad debt from banks would help lighten the burden of banks as they grapple with what was the world’s worst bad loan ratio even before the virus pandemic virtually halted economic activity through the world’s biggest lockdown.
- The discussions are at a very preliminary stage and the aim is to supplement the efforts of asset reconstruction companies in reducing the bad loans of these lenders, the officials said. A finance ministry spokesman was not immediately available for a comment.
- Alternate investment funds are a home-grown and locally regulated class of hedge funds, that have increasingly become popular vehicles for a range of investors from wealthy local investors to global distressed credit funds to use. Investors must commit at least 10 million rupees, and largely comprise global hedge funds, wealthy local investors, and the investment vehicles of tycoons.
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As a result of the rise in prominence of independent firms and strides in technology, wealthy individuals and families have greater options than ever in the selection of top-tier wealth-advisory services.
Today, individuals with $25 million or more in portfolio assets (or individuals who anticipate having those assets in the near term through a liquidity event) can expect services that in the past only single-family offices could have provided.