FINAVENTURE Private Equity Pharma Fund
FinaVenture Advisory Services India Pvt. Ltd., is a privately held company that invests in companies in need for change and actively contributes to their development. In addition, FinaVenture provides seed capital and restructuring capital to mid-sized companies. FinaVenture invests in Pharma sectors with companies having interest in all verticals of Pharma. Apart from the investment operations, FinaVenture is also engaged in fee based income for providing financial services for companies by syndication of various debt instruments. FinaVenture was founded in 1999 by Vinayak Kudva.
E-209, Tower No.3, 2nd Floor, International Infotech Park, Vashi, New Mumbai – 400703 Tel. No. 022-65747515, 022-65747506 Fax 022-7810924 finaventure@eth.net www.finaventure.com
FINAVENTURE Private Equity Pharma Fund
What we do In our investment activities, we depart from a macro-economic analysis. We believe that successful investment depends on understanding the motivations of the people who will buy the goods and services produced by the companies that we invest in, as well as an understanding of the economic forces acting on them. Since inception, FinaVenture has carried out more than 10 investments in various VERTICALS of PHARMA sector. FinaVenture believes in active ownership, and has been actively involved in companies in different stages to improve long-term profitability and growth. The successful track record in transforming ailing companies includes the restructuring of company.
E-209, Tower No.3, 2nd Floor, International Infotech Park, Vashi, New Mumbai – 400703 Tel. No. 022-65747515, 022-65747506 Fax 022-7810924 finaventure@eth.net www.finaventure.com
FINAVENTURE Private Equity Pharma Fund
Today, FinaVenture’ invest its own funds earned through internal accruals. Apart from capital we offer our expertise to management drawing on our own resources as well as an extensive network of specialists to aid company’s transformation in a variety of ways. FinaVenture is an independent investment company, not bound by pre-defined restrictions in regards to our search for investment opportunities. We invest in companies in a variety of markets and stages. We view ourselves as problem solvers and tailor the type of capital and level of activity we offer for the specific need of the situation. This means that we can, depending on the circumstances, be either lenders, or equity owners, or both. Our management approach can take the form either of driving change or partnership with existing owners.
E-209, Tower No.3, 2nd Floor, International Infotech Park, Vashi, New Mumbai – 400703 Tel. No. 022-65747515, 022-65747506 Fax 022-7810924 finaventure@eth.net www.finaventure.com
FINAVENTURE Private Equity Pharma Fund
There are two broad categories that we look for when evaluating potential investment opportunities. On the one hand we seek companies that have a need for change and would benefit from an active investor with a longer term perspective – typically restructuring or turnarounds of underperforming companies facing the dual problems of structural inefficiency and lack of innovation. In such cases, we typically prefer to participate via active investments. Currently FinaVenture is the principal shareholder in the On the other hand we look for companies that are performing well, but which have the potential to develop further with added capital and some guidance. Typical scenarios could be organic expansion, acquisition, refinancing, management buy-outs and succession. In such cases, we get growth capital via other large private equity investor. In addition to our investment activities, a proportion of our capital is invested in our own asset management operation, primarily in tradable securities.
E-209, Tower No.3, 2nd Floor, International Infotech Park, Vashi, New Mumbai – 400703 Tel. No. 022-65747515, 022-65747506 Fax 022-7810924 finaventure@eth.net www.finaventure.com
FINAVENTURE Private Equity Pharma Fund
How we view the world For FinaVenture, which is essentially in the business of managing change, an understanding of both the economy and the society in which we work is essential. FinaVenture believes that successful investment depends on understanding the motivations of the people who will buy the goods and services produced by the companies that we invest in, as well as an understanding of the economic forces acting on them.
E-209, Tower No.3, 2nd Floor, International Infotech Park, Vashi, New Mumbai – 400703 Tel. No. 022-65747515, 022-65747506 Fax 022-7810924 finaventure@eth.net www.finaventure.com
FINAVENTURE Private Equity Pharma Fund
Study of the Indian economy from the end of controlled environment to the present reminds us that there were 16 years of sound growth built on innovation, in which both the economy and consumer purchasing power grew rapidly creating a strong middle class, and that these were followed by 10 years of what can be seen as problematic growth, in which India’s continuing prosperity has been based on increasing consumer debt. Analysis now suggests that in the coming 16 year period, Europe & USA is facing weak growth prospects or even stagnation. Its economy needs to undergo continued radical restructuring that started with the primary heavy industries, which has already overtaken consumer products and is now moving into the services sector.
The initial response by conventional investors to structural changes in the economy has been to improve returns by cutting costs in the manufacturing base, including investment in new product, a classic example of short-termism whose long-term result is to further undermine its competitiveness. At FinaVenture we understand the need to rationalise costs, but we also believe in the need to invest in product based innovation. We look for companies that have the potential to grow and change. And we help to make that growth possible.
E-209, Tower No.3, 2nd Floor, International Infotech Park, Vashi, New Mumbai – 400703 Tel. No. 022-65747515, 022-65747506 Fax 022-7810924 finaventure@eth.net www.finaventure.com
FINAVENTURE Private Equity Pharma Fund
How we invest FinaVenture’ independence helps us avoid preconceptions in our search for investment opportunities. We are limited to specific phases of a company’s development, to a pre-defined sector with a formula for an investment structure. We see ourselves as problem solvers and tailor the type of capital and level of activity we offer to the specific needs of a situation. This means that we can, depending on the circumstances be either lenders, or equity owners, or both. And our management approach can take the form either of active ownership or partnership with existing owners. There are however two broad categories that we look for when evaluating potential investment opportunities.
E-209, Tower No.3, 2nd Floor, International Infotech Park, Vashi, New Mumbai – 400703 Tel. No. 022-65747515, 022-65747506 Fax 022-7810924 finaventure@eth.net www.finaventure.com
FINAVENTURE Private Equity Pharma Fund
Active investments The majority of FinaVenture’ investments historically have been via active investments. As shareholders we have been part of an extensive list of successful company transformations. Apart from capital, FinaVenture brings an expertise in change management drawing on our own resources as well as an extensive network of specialists to aid the company transformation in a variety of ways. FinaVenture does not operate with pre-defined restrictions in regards to which companies, which stages, which markets or which industries it should invest in. The investment process is highly restrictive to pharma sector. Despite the fact that it involves a number of pre-defined steps – owing to our ownership structure and to the non-bureaucratic heritage and structure of FinaVenture – we are able to take a case from initial discussions to invested funds in a very short time. We are able to react quickly to an opportunity when it is presented. Typically, FinaVenture’ active investments carry the following characteristics: Investment size: Use of capital: Company situation: Geographical focus: Risk management:
E-209, Tower No.3, 2nd Floor, International Infotech Park, Vashi, New Mumbai – 400703 Tel. No. 022-65747515, 022-65747506 Fax 022-7810924 finaventure@eth.net www.finaventure.com
FINAVENTURE Private Equity Pharma Fund
Development capital FinaVenture is moving to meet what we believe to be an important, unfilled need among mid-size Indian pharmaceuticals companies that want to initiate expansion or restructuring, but are unable to acquire bank financing and unwilling to dilute current ownership to fund such initiatives. In the future we intend to increase our investments in this area. We see this as a major investment opportunity, targeting capital needs that cannot currently be financed because of conservative loan policies of banks and others. The present Indian market for subordinate capital is in relative terms just very small compare to developed economy what it is in the US & Europe. We think there is a significant need for a more active market of this kind and aim to take part in developing it. Our ambition is to grow into that gap in the market, by becoming a problem solver for those mid size companies in need of capital. We don’t have a single formula for our relationships with potential borrowers, but will try to find the right mix of active participation and capital structure for each individual case. What is important to us is keeping a close working relationship with management and owners, so that we can anticipate changing needs as they may arise. FinaVenture looks for partnerships with the owners of the companies that we lend to. In contrast to those investments in which we take an active role in a well defined process of change, we look for companies with a good cash flow generation capacity, and in less challenging circumstances, that are well run, and are looking for funds for e.g. expansion and restructuring. Unlike most lenders, FinaVenture’ experience in change management gives us the know how to become active partners should the need arise in the case of financial targets not being met. To date, FinaVenture has made a number of investments in development capital. Read more about our development capital investments.
E-209, Tower No.3, 2nd Floor, International Infotech Park, Vashi, New Mumbai – 400703 Tel. No. 022-65747515, 022-65747506 Fax 022-7810924 finaventure@eth.net www.finaventure.com
FINAVENTURE Private Equity Pharma Fund
Typically, a FinaVenture development capital investment carries the following characteristics: Investment size: Use of capital:
Expansion (including add-on acquisitions) Restructuring Re-financing
Company situation:
Mature, healthy companies or challengers in mature industries with development potential
Geographical focus:
India
Risk management:
Financial covenants Pledge in assets (if balance sheet permits) Board representation
Asset management As a private company we need sufficient financial liquidity and resources to be able to meet demands and opportunities from our development plans as they arise over time. That means investing a proportion of our funds in a liquid, lower risk way. And that also gives us the scope to use our capital to take advantage of fundamental mispricing, be they in currencies, in stock markets or in commodities.
E-209, Tower No.3, 2nd Floor, International Infotech Park, Vashi, New Mumbai – 400703 Tel. No. 022-65747515, 022-65747506 Fax 022-7810924 finaventure@eth.net www.finaventure.com
FINAVENTURE Private Equity Pharma Fund
Our investments in the asset management operation are in tradable securities and derivatives with sufficient liquidity. The investment strategies are mostly long-term, and are based on an analysis of investment fundamentals building on the same macro view that informs our other activities. FinaVenture are generalists in an investment world where most people specialize. FinaVenture' investments range from very complex financial instruments, to more basic schemes. Our underlying approach is not to follow the market but to act on our own conviction and analysis. We are always ready to invest where others don’t.
E-209, Tower No.3, 2nd Floor, International Infotech Park, Vashi, New Mumbai – 400703 Tel. No. 022-65747515, 022-65747506 Fax 022-7810924 finaventure@eth.net www.finaventure.com
FINAVENTURE Private Equity Pharma Fund
Investment focus Our investment philosophy is based on seven principles: Product centric growth Long-term growth must start with the product. Apart from driving sales, a successful and innovative product gives a company visibility. It attracts attention and is the most solid foundation for building a culture of success and a brand with real substance. Innovation and structure FinaVenture believes in introducing innovation and creativity into established businesses to stimulate growth. This can be achieved through internal development, partnership, and acquisition, or any combination of the three. FinaVenture looks for stagnating companies with strong production or distribution assets, but lagging in product development. Long-term view
E-209, Tower No.3, 2nd Floor, International Infotech Park, Vashi, New Mumbai – 400703 Tel. No. 022-65747515, 022-65747506 Fax 022-7810924 finaventure@eth.net www.finaventure.com
FINAVENTURE Private Equity Pharma Fund
To realise the potential in most companies, a long-term perspective is necessary – especially when the ambition is to achieve sustainable growth. FinaVenture’ financial strength brings the staying power and strategic perseverance required for the long-term value creation in a company. Influence In order to be able to actively manage the value creating process and control risk, FinaVenture, together with its investment partners, needs an appropriate level of influence. In companies in a need of change, this means having de facto control. In the case of FinaVenture offering development capital, influence can be secured through agreeing on key performance indicators and establishing a close partnership with the owners and management of the company. Partnering FinaVenture believes that many investments benefit from involving partners, either as investors or as specialists, to make the most of the company’s potential. FinaVenture looks to play a coordinating, leading role in this process. Close to home FinaVenture only makes investments where we have a fundamental understanding of the key risks. Experience, analysis and partnering can define the areas in which FinaVenture feels comfortable investing. Activity, not diversification It is FinaVenture’ belief that an active management role is a more effective route to reducing risk than diversifying investment over a range of different projects. FinaVenture plans to make a relatively small number of investments on their own specific merits, rather than hold a larger number of stakes as part of a portfolio diversification strategy.
E-209, Tower No.3, 2nd Floor, International Infotech Park, Vashi, New Mumbai – 400703 Tel. No. 022-65747515, 022-65747506 Fax 022-7810924 finaventure@eth.net www.finaventure.com
FINAVENTURE Private Equity Pharma Fund
Investment process FinaVenture does not operate with any pre-defined restrictions in regards to which companies, which stages, which markets or which industries it should invest in. The investment process is highly flexible. Despite the fact that it involves a number of pre-defined steps – owing to our ownership structure and to the non-bureaucratic heritage and structure of FinaVenture – we are able to take a case from initial discussions to invested funds in a very short time. We are able to react to an opportunity when it is presented. FinaVenture actively monitors the pharma sector, structures and companies to identify potential investments. FinaVenture also receives investment ideas from our network, from different intermediaries in various markets, and directly from target companies. On average the FinaVenture investment team reviews and analyses more than 30 investment opportunities per year.
E-209, Tower No.3, 2nd Floor, International Infotech Park, Vashi, New Mumbai – 400703 Tel. No. 022-65747515, 022-65747506 Fax 022-7810924 finaventure@eth.net www.finaventure.com
FINAVENTURE Private Equity Pharma Fund
Our history FinaVenture was founded in 1999 by Vinayak Kudva. It acquired a listed company on the Bombay Stock Exchange in September 2008. This investment was done to unlock value and to have further opportunity to raise funds for growth capital.
Contact the people at FinaVenture Board of Directors: Vinayak kudva Santosh kudva Advisory board: Investment team: Research and Communication Administration:
E-209, Tower No.3, 2nd Floor, International Infotech Park, Vashi, New Mumbai – 400703 Tel. No. 022-65747515, 022-65747506 Fax 022-7810924 finaventure@eth.net www.finaventure.com