ArthVeda STAR Fund II Investments in low-risk, Middle Income Residential Real Estate Developments across India Strictly confidential. For private circulation only.
Index About ArthVeda and Group STAR Fund II – Investment Proposition Offshore Set-up for STAR Fund II STAR Fund I Domestic Fund for Mid Income Housing in Metro Outskirts and Tier 1/2 Cities (Genesis of the ArthVeda residential real estate investment strategy) Offshore Investors can now invest in the STAR investment strategy What makes an investment in Real Estate Residential Development profitable? Appendices Opportunities & Constraints in Mid Income Housing DHFL presence in target locations STAR Fund I: Project Highlights DREAM Fund: Investment Summary Tax Efficiency of Pooling Locations 2 Strictly confidential. For private circulation only.
Index About ArthVeda and Group STAR Fund II – Investment Proposition Offshore Set-up for STAR Fund II STAR Fund I Domestic Fund for Mid Income Housing in Metro Outskirts and Tier 1/2 Cities (Genesis of the ArthVeda residential real estate investment strategy) Offshore Investors can now invest in the STAR investment strategy What makes an investment in Real Estate Residential Development profitable? Appendices Opportunities & Constraints in Mid Income Housing DHFL presence in target locations STAR Fund I: Project Highlights DREAM Fund: Investment Summary Tax Efficiency of Pooling Locations 3 Strictly confidential. For private circulation only.
ArthVeda is a Real Estate Focused Fund House in India ArthVeda investments have been deployed in over 6 million sqft of real estate development Fund Name Details • Closed in 2006 with focus on residential properties in Metros and Tier 1 cities • The fund has an AUM of US$ 17 mil (INR 1 bil)*. Returns were re-invested and exits for round 2 are also completed • DREAM FUND I Exited fully in June 2015 • Exits ranged between 7% - 45% (INR returns) • Gross return to the investor of 14.75% CAGR (before fees and expenses) • Launched in 2012 with a focus on mid-income housing in tier 2 and tier 3 cities • STAR FUND I Final Closure in May 2015 • Housing for Middle Income Fund is in deployment phase with AUM of US$ 23 mil (INR 1.4 bil)* • Target Gross Return (Project Level): 30% in INR Households • (in association with DHFL) 2 Exits already achieved with IRRs in excess of 31% • The fund is expected to exit 70% of its AUM by Mar-2016 • This will be ArthVeda’s 3 rd Real estate fund • Scaled up version of the existing Star Fund I STAR FUND II • The fund will focus on Residential Projects targeted at middle income households (in association with DHFL) • Target fund size ~USD 250 mil (INR 15 bil) • The Fund will be managed in conjunction with DHFL • This will be ArthVeda’s 4 th Real Estate Fund and will be launched in June 2015 ASHA FUND • The fund will invest in Residential Projects for Low Income Groups in Tier II/III cities and Metro Outskirts Housing for Low Income • The fund will be targeted only towards large domestic investors in India such as Banks, Insurance Companies and Households Family Offices (in association with Aadhar) • This fund will be launched and managed in conjunction with AHFL * 1 USD = 60 INR AUM = Assets Under Management; DHFL = Dewan Housing Finance Corporation Ltd AHFL = Aadhar Housing Finance Limited DHFL and Aadhar are Group companies of ArthVeda. Details available in later sections 4 Strictly confidential. For private circulation only.
ArthVeda Specializes in Low/Mid Income Housing Investments Headed by Mr. Bikram Sen Former CEO of DHFL Asset Management Company regulated ArthVeda Fund Management Pvt Ltd (AVFM) by SEBI Real Estate Vertical Traded Markets Vertical Alpha Strategy Funds Dream Fund I Star Fund I Strategies for Global & Focused Real Middle Income Housing with Indian Equities Estate Fund focus on Tier II/III Cities Mid Income Housing Asha Fund* Low Funds Low Income Star Fund II* Income Housing with focus Investing in Mid Income Housing on Residential Projects Fund Tier II/III Cities SEBI = Securities and Exchange Board of India *To be launched in FY15-16 5 Strictly confidential. For private circulation only.
ArthVeda is part of a Leading Financial Services Group in India Financial Services Group Dewan Housing DHFL Vysya Aadhar Housing DHFL Pramerica DHFL Prameica Finance Corporation Housing Finance Avanse Finance Ltd Life Insurance Asset Managers Ltd (DHFL) Ltd • 2nd largest private sector • Specializes in • JV with IFC • JV with Prudential • JV with IFC • JV with Prudential mortgage finance company mortgage finance to Washington International Washington Financial Inc. in India with a sound track lower & middle • Exclusive focus on Insurance Holdings • Education loan • Manages Mutual record of 30 years income segment low income segment Ltd. provider Funds • Specializes in mortgage • Key shareholders: • Deep penetration in • Life Insurance • Key shareholders: • Key shareholders: finance & construction DHFL with 9.47% Tier II/III cities of provider DHFL with 48.50%, 50% with Wadhawan funding to Lower & Middle and 85.34% with India as well • Key shareholders: IFC with 20% and Group Income segment Wadhawan family & • Key shareholders: DHFL with 50% and remaining 31.50% • This is a proposed JV • Key shareholders: 34.95% their entities DHFL with 14.90% 24% with Wadhawan with Wadhawan and SEBI approval is with Wadhawan family & and 64% with Family entities family & their entities awaited their entities Wadhawan family & their entities Spanning the entire end-user financing in Indian real estate 100% Owned by > USD 16,667 Promoters of DHFL DHFL USD 8,333 – 16,667 ArthVeda Fund Management Pvt Ltd DHFL Vysya Specializes in managing Low/Mid Income USD 5,000 – 8,333 Housing Real Estate Investments across Aadhar Metros, Tier 1 and Tier 2 cities Housing < USD 5,000 JV = Joint Venture; IFC = International Finance Corporation Pyramid based on the loan ticket size 6 Strictly confidential. For private circulation only.
DHFL – The flagship company of the Group Deep penetration into Low/Middle Income Households across India 2 nd Largest Private Sector HFC in Housing & Construction Finance to 736 Locations across India* India Low/Mid Income • 30 years of sound track record • Loan Book of ~USD 9.5 billion as of • ~80% of distribution footprint in Tier II • Listed on National Stock Exchange 31 st March 2015 & Tier III cities and Towns (NSE) and Bombay Stock Exchange • Focus on Low/Mid Income • Each branch has Households • Credit Team (BSE) • Credit Rating of AAA by CARE • Disbursements in Tier II and Tier III • Sales Team • Regulated by National Housing Bank cities and Towns • Technical Team (NHB) • Accounts Team Average Size of an Individual Loan (as of Mar ‘15) 20,000 1,200 INR ('000) USD * As of 31 st Mar 2015. Includes 364 self-operated locations and 372 locations through alliances HFC = Housing Finance Company 1 USD = 60 INR 7 Strictly confidential. For private circulation only.
Aadhar – Housing Finance for Low Income Households JV between DHFL and IFC Deep Penetration in Low Income Catering to Low Income Households^ Washington States* • Established in 2011 • 75% of customers earn below $ • Present in 9 States and now plans to • India’s first low-income segment 500/month (INR 30,000) go pan-India focused HFC • 23% of customers are self-employed • 63 Branches • Monthly Household Income of Target • 267 locations • Offers home loans to low income salaried and self-employed Customers: US$ 85 – 420 (INR 5,000 individuals – 25,000) • Registered as an HFC and regulated by the NHB Figures in '000 INR Figures in USD 1,200 20,000 640 10,667 Average Ticket Maximum Loan Average Ticket Maximum Loan Size Limit Size Limit HFC = Housing Finance Company; IFC = International Finance Corporation; JV = Joint Venture 1 USD = 60 INR *As of Mar 15 8 Strictly confidential. For private circulation only.
Synergies among Group Businesses ArthVeda Provides Equity Finance Low & Mid Income Housing Projects Purchase by these households enables exit of DHFL ArthVeda from its investments DPLI Aadhar DHFL Vysya Low & Mid Income DPAM Households DPLI = DHFL Pramerica Life Insurance DPAM = DHFL Pramerica Asset Managers 9 Strictly confidential. For private circulation only.
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