Vivriti Diversified Bond – II

The Vivriti Diversified Bond Fund aims to deliver superior risk-adjusted returns by investing in a diversified portfolio of high-quality, investment-grade debt instruments. The fund focuses on mid-sized companies with proven business models, seeking capital for growth and operational requirements.

The Vivriti Diversified Bond Fund aims to deliver predictable, risk-adjusted returns by investing in debt instruments issued by mid-sized companies that operate outside traditional capital markets and syndicated loan markets. The fund predominantly focuses on investment-grade, secured investments in bankable, operational, and profitable companies. With a diversified portfolio and an average exposure of 5-6% per entity at full deployment, the fund targets returns in the range of ~12.50% to 13.50% for investors. Additionally, it offers steady and predictable quarterly income distributions, aiming for an annualized XIRR of ~10%.

The fund operates with a core philosophy of balancing risk and return through disciplined credit selection and a focus on high-quality issuers. By targeting businesses with established operations, healthy financial margins, and sectoral tailwinds, the fund avoids early-stage risks and equity market linkages. It emphasizes sustainable cash flows to ensure reliable debt servicing and minimizes event risks.

Key Features

• Target Returns: Pre-tax XIRR of 15–16%, with a post-tax hurdle rate of ~11.25–11.50%.
• Liquidity: Quarterly income distributions post-deployment, providing predictable cash flows for investors.
• Risk Management: Stringent due diligence processes and an in-house monitoring framework ensure asset quality and timely debt servicing.

• Target Investments:

• • • Mid-sized firms with annual revenues between INR 250–5,000 crore, operating with established business models and profitability.
    • Focus on working capital, capital expenditure, refinancing, and product development needs.
    • Investments are typically structured as 2-4 year debentures secured by receivables, immovable assets, or guarantees.

• Exclusions:

• • • Avoids early-stage businesses, distressed investments, and entities with high equity market linkage risks.

• Portfolio Management:

• • Prioritizes diversification across issuers and sectors to manage risk effectively.
  • Aims for steady income through predictable cash flows and high credit-quality investments.