View on the Fund

Northern Arc Finserv Fund is a specialized, illiquid private credit allocation suitable for investors seeking: - 14-14.5% gross yield (pre-tax) in exchange for accepting complete illiquidity for 4 years - Quarterly cash income via coupon payments, with principal return at maturity

Strategy

High Yield + Regular CashFlow

Fund's Strategy View

Northern Arc Finserv Fund invests primarily in privately originated structured debt instruments issued by NBFCs and financial institutions, with a diversified portfolio across multiple sectors such as MSME financing, microfinance, affordable housing, consumer finance, vehicle finance, agri-finance, and fintech. The fund typically maintains exposure to ~20–25 portfolio companies from Northern Arc’s proprietary originator pool of 300+ entities. All investments are made in secured debt structures with investment-grade equivalent ratings, and are subject to comprehensive due diligence and ongoing post-investment monitoring. The fund is structured as a Category II close-ended AIF with a 4-year tenure, offering quarterly coupon payouts and principal repayment at maturity, targeting gross IRRs of ~14–14.5%

Fund Performance

We refrain from evaluating the fund since it is yet to mature (less than 5 years).

View on AMC

We recognise Northern Arc’s strong institutional capabilities in credit origination, underwriting, and structuring, particularly across India’s financial inclusion ecosystem. Over the past 14 years, the platform has built durable sourcing advantages through deep originator relationships (300+ NBFC partnerships), proprietary field-level data, and disciplined credit selection. This is evidenced by six fully exited fund vintages (2015–2021) that delivered above-target returns with zero defaults. Based on this track record and execution strength, we recommend Northern Arc as a credible option in the private credit space

AMC's Pedigree

Northern Arc Capital has built a credible credit platform with demonstrated underwriting and origination capabilities. Its asset management arm, Northern Arc Investments, has scaled to over 6,500 crore in AUM and brings a 10+ year AIF track record (since 2014). This is evidenced by six fully exited fund vintages (2015–2021) that delivered above-target returns with zero defaults

AMC Team

The fund management team does not carry deep senior-level institutional asset management pedigree, with the company seeming to be focusing more on the credit underwriting skills of the larger organisation (as compared to star fund managers). Bhavdeep Bhatt (CEO) brings over 25 years of experience across leading AMCs such as Kotak, ICICI Prudential, and Aditya Birla; however, his prior roles were primarily within sales & products rather than direct credit investing, and his tenure at Northern Arc spans approximately three years. The fund managers, Archana Rangarajan and Shubham Katiyar, each bring around nine years of experience, largely across transaction advisory roles (EY, Deloitte) and direct lending at Northern Arc Capital. While they demonstrate strong credit analytical capability, they have not previously operated as senior fiduciary decision-makers managing pooled capital across cycles. The Investment Committee comprises senior Northern Arc Capital executives with extensive credit market experience, but similarly without a prior independent fund management track record before the establishment of this platform.

Investment Philosophy

Northern Arc’s investment philosophy is rooted in its deep credit underwriting capabilities, built over years of operating as a credit platform through its lending and syndication businesses. Its ability to leverage proprietary data, conduct rigorous due diligence, and maintain active relationships with over 300 originator NBFCs across India strengthens its credit sourcing pipeline for the PMS and AIF platforms