We have set up a trust and fund entity, “129 Wealth Fund,” for our upcoming AIF. The SEBI application will be completed by the end of July 2024. Following this, SEBI approval and the fund launch will take another 3-4 months. We are hopeful that we can launch the AIF by the end of 2024. Currently, we are collecting “Expressions of Interest” to prepare for the launch. Domestic investors, corporate entities, and NRIs can invest in the AIF. Even foreigners can invest in foreign currency under a differentiated structure (Offshore Fund).
Kindly Google the term “Category III AIF” to learn more about the AIF structure. For any queries, you can reply to this email. We will conduct a webinar or release a video (on later dates) to address all queries and provide clarifications related to the AIF.
P.S. Our advisory (stock recommendation) service will continue for retail investors. However, with the increased number of clients, low-volume stocks with higher return potential might gradually fall outside the scope of our recommendations.
Upcoming Launch – Fund Management Service by Prasenjit Paul
We are pleased to announce that we will launch a Category III AIF (Alternative Investment Fund), a SEBI-regulated entity, for fund management service. Since 2013, we have been providing equity advisory services to thousands of clients and can confidently say that the upcoming AIF will have the highest return potential, surpassing our previous return records, due to the following reasons:
Assured IPO allotment – We have witnessed how selected SME IPOs generate 100%+ return on the listing day itself. However, due to massive oversubscription, it is very difficult for retail investors to receive an allotment. Our proposed fund house, Category III AIF, falls under the “institutional investor” category and can participate in the “Anchor Book” and QIB segment, where allotment is assured. The minimum application for an Anchor investor in an SME IPO is INR 1 crore, and in a mainboard IPO, it is INR 10 crore. You can Google the term “Anchor book in IPO” for more details. No other investment option, including PMS, can offer such assured allotment in IPOs.
SEBI monitored Skin in the Game – As per SEBI’s mandate, we, as the sponsor entity, must invest 5% of the fund corpus or Rs. 10 crore and remain invested for the entire fund lifecycle. This capital commitment is periodically monitored by SEBI. This means that our own capital, up to INR 10 crore, will remain invested in fund and will earn the exact same return like other investors. In advisory or PMS services, there is always a return earning gap between the service provider and investors. However, in the AIF structure, the entire fund is pooled into a single entity, similar to a mutual fund, and then invested. Investors receive units, ensuring uniform returns across all investors, including the sponsor/manager (us). In PMS, every investor’s fund remains in a separate demat account, managed separately, resulting in varying returns.
Liquidity Issue in advisory (stock recommendation) model – Like all service providers, we often face liquidity issues with the existing advisory (stock recommendation) model. We frequently identify attractive investment opportunities in low-volume stocks and invest from our own accounts but can’t recommend them to our members due to the low daily trading volume. Recommending such stocks can lead to multiple upper circuits by the time all our members invest, causing the stock price to rise beyond the “Good Buy” level. “Exit” from such stocks is even more challenging. Consequently, our existing “Smallcap/Microcap Multibagger Stock Recommendation” service becomes unviable beyond a certain number of investors, raising serious doubts about the sustainability of low-volume stock recommendations under the current advisory model. An AIF can acquire low-volume SME stocks through the pre-IPO Anchor allotment itself. Furthermore, it is easier to accumulate low-volume stocks from a single trading account via the AIF entity compared to doing so from multiple accounts in the PMS or advisory model. The capital pooling structure with the fund manager’s mandatory skin-in-the-game offers a significant advantage in AIF for return maximization.
Putting it all together, AIF is a mutual fund-like structure for high net worth individuals that offers maximum return potential. For this reason, the number of SEBI-registered AIFs has more than doubled in the past few years. The only disadvantage for retail investors is that SEBI mandates a minimum investment of INR 1 crore in any Cat III AIF scheme.
We have set up a trust and fund entity, “129 Wealth Fund,” for our upcoming AIF. The SEBI application will be completed by the end of July 2024. Following this, SEBI approval and the fund launch will take another 3-4 months. We are hopeful that we can launch the AIF by the end of 2024. Currently, we are collecting “Expressions of Interest” to prepare for the launch. Domestic investors, corporate entities, and NRIs can invest in the AIF. Even foreigners can invest in foreign currency under a differentiated structure (Offshore Fund).
Click here to fill out the form if you are interested in our upcoming AIF for return maximization.
Kindly Google the term “Category III AIF” to learn more about the AIF structure. For any queries, you can reply to this email. We will conduct a webinar or release a video (on later dates) to address all queries and provide clarifications related to the AIF.
P.S. Our advisory (stock recommendation) service will continue for retail investors. However, with the increased number of clients, low-volume stocks with higher return potential might gradually fall outside the scope of our recommendations.