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Shiv Gupta, Founder and CEO, Sanctum Wealth Management

indiainfoline, Apr 21, 2021

Financialization of savings, favorable regulatory moves, and the growth of investment managers looking to participate in India’s structural growth have already contributed to the rapid growth of AIFs.

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In an interaction with Shweta Papriwal, Editor, indiainfoline.com, Mr. Shiv Gupta, Founder and CEO, Sanctum Wealth Management said, “Welspun One Logistics Parks Fund 1 is a SEBI-registered category II AIF and hence is suitable for long term investors who understand the underlying risks of the investment and are comfortable with low liquidity and intermittent cashflows”.

What kind of interest have you witnessed among the investors so far for the Welspun One AIF?

We have seen strong and broad-based interest from our clients in this product across all our geographies and client segments. Being India’s first domestic warehousing fund, it is a unique opportunity with a compelling underlying economic hypothesis and an appealing investment structure. The AIF has the added feature of being an integrated platform with strong execution capabilities across the value chain including acquisition, development, leasing and divestment.

Any interesting trends you witnessed among investors of this AIF?

Sophisticated investors are always on the lookout for differentiated ideas, and the search for higher yields has been amplified by falling interest rates. This sector has seen significant institutional money flow over the last few years and is now starting to see considerable private investor interest. Further, the pandemic has given a boost to ecommerce across the value chain of which warehousing and logistics are important components. The investment hypothesis for this AIF is strengthened by high demand and low vacancies, limited approvals and development risk, a shorter development period as compared to other real estate projects, attractive development returns, and stable long-term yields backed by high-quality tenants.

What kind of investors should opt for this AIF?

Welspun One Logistics Parks Fund 1 is a SEBI-registered category II AIF and hence is suitable for long term investors who understand the underlying risks of the investment and are comfortable with low liquidity and intermittent cashflows. The risk-reward ratio is attractive and makes for a strong case for diversification in existing portfolios.

What is the general investor sentiment with respect to attractive, niche offerings such as this AIF? Are we likely to see more iterations of similar products?

Clients are very open to evaluating differentiated opportunities across all asset classes. Falling fixed income yields and concerns around valuations and potential volatility in equities have made the prospect of investing in assets classes with higher yields and lower correlation with traditional assets more attractive. AIFs now form a more substantial part of HNW and UHNI portfolios and this trend is expected to continue. Within these, we expect to see more innovation across instruments and pay-off profiles in the years ahead.

What is the strategy of democratising high yield products like this AIF to a wider cross-section of investors? Your thoughts on broad-based wealth creation?

Financialization of savings, favorable regulatory moves, and the growth of investment managers looking to participate in India’s structural growth have already contributed to the rapid growth of AIFs. The ecosystem has come a long way in terms of ensuring that policies, compliance, and information flows foster democratization.

Further, the positive trends supporting this are expected to continue, to enable high standards of integrity and transparency alongside the standardisation of management practices in the unlisted space. India’s structural growth prospects remain positive, and we expect wealth creation to continue across all segments of the population.

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