The FFS, as per Sidbi letter, will consider paying a higher management fee after taking an overall view on the total expenses, and if a fund is women-led, focuses on women-led startups, priority areas, agro-rural sector, financial inclusion, and is committed to invest in tier-2 and -3 centres. The share of carry would be 30% (of the incremental return) if the fund achieves an IRR of above 30%. The FFS is now ready to pass on 25% of the incremental returns (over and above the new IRR) if the IRR exceeds 25%. The ‘carry’ or the profit sharing (once the fund’s IRR crosses the hurdle rate) is typically in the ratio of 80:20, with 20% going to the manager. Since AIFs often take a long time to mobilise capital from other investors, a quicker drawdown of the money committed by the FFS will enable that the deal making capability of AIFs is not hampered. Sidbimanaged FFS has been one of the most important domestic institutional investors in Indian VC Funds and the liberalisation of many existing onerous terms in the investment agreements will help in aligning such terms with those prevalent globally,” said Tejesh Chitlangi, senior partner, IC Universal Legal. “These are concrete steps to ensure that investments by the FFS in eligible Indian AIFs can be on better commercial terms when it comes to management fee, carried interest for the qualifying and performing fund managers, whilst also extending more flexibility to fund managers in their day-to-day operations. In a letter dated April 29, 2022, Sidbi told AIFs that it would allow “accelerated drawdowns” of the money committed by the FFS while fund managers achieve internal rate of returns (IRR) higher than the hurdle rate - the minimum return a fund has to clock in before profits can be shared between investors and fund manager. This is truly a reflection of the dedication and hard work of our Funds team in not only consistently providing high-quality advice to our clients, but also in helping to shape the market when it comes to fund formation.Sidbi is the country’s largest limited partner (LP) or investor contributing to the capital of VC and PE funds.
Bluegem Capital Partners on the structuring and fundraise of its new mid-market PE fund, Bluegem IIIĬommenting on the win, Funds Partner, Sam Kay, said: "I am delighted that our team has once again won the Legal Fund Formation Award at the Drawdown Awards.The fund was raised virtually during the global pandemic, launching in March and closing in June Elysian Capital LLP on its third vintage private equity fund Elysian Capital III LP.EQT AB, the largest alternative investment fund manager in the Nordic region, on the strategic sale of its Credit business segment to Bridgepoint.on the spin-out of the Irish private equity investment team from The Carlyle Group in early 2020 forming Melior Equity Partners and the subsequent fundraising and closing of Melior Equity Partners II.As well as advising on these mandates, the award recognises the team for its work to innovatively shape the market with new liquidity options available to private funds, from LP tender offers, to fund recaps, preferred equity transactions and NAV-based lending. The team advised on mandates from leading UK, European and global private equity funds, from venture through to growth, mid-market and larger buyout firms. The team was recognised for its work supporting clients on over 20 fundraisings with aggregate commitments of multiple billions. The judging panel for this year's awards was made up on leading private capital fund COOs, CFOs, CCOs, GCs and CTOs. The service provider awards celebrate a wide range of suppliers and vendors that have demonstrated expertise and top-class client services standards in their provision of services and advice to the private equity fund community. The Drawdown Awards celebrate excellence and innovation within private capital fund operations. Derivatives & Structured Finance Disputes
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