Ab ou t At he na Ve n tu r e & Eq u itie s Li mite d
YOUR INVESTMENT PARTNER
We are an Alternative Investment Fund Management Company incorporated with the Registrar of Joint Stock Companies & Firms under the Companies Act 1994 with registration no.
Athena First General Fund
C-125433/2015, dated September 01, 2015, and obtained certificate of registration no. AIFM-04/2016,
dated March 27, 2016 from the Bangladesh Securities and Exchange Commission (BSEC) to carry on Alternative Investment business in Bangladesh
as per the BSEC (Alternative Investment) Rules, 2015. Our core objective is to facilitate invention, innovation and creativity through equity/equity linked investments in the growth companies, which would
Bu si ne ss
Na m e
We are in the company-building business, and our
Corporate Head Office: Rupayon Trade Center (Level 3), 114 Kazi Nazrul Islam Avenue, Bangla Motor, Dhaka.
directors and management team have a proud history of leveraging relationships to build teams, attract investors and investees and then–together–build high value businesses.
Phone: 0255138708 Fax: 0255138709 Web: athenaventure.com
At he n a V e nt ur e & Eq u it ie s L i mi te d ( AV E L)
turn Bangladesh into a developed country by 2050.
Investment Focus of Athena First General Fund
Invest only in the sector with high growth potential
Neutralize information asymmetry , moral hazard, and adverse selection problems existing in traditional financing system
Invest through equity/equity linked instruments in a wide range of companies when nobody else is willing to finance
What is Venture Capital?
our directors and management team have a proud history of leveraging relationships to build teams, attract partners and customers and then–together– build high value businesses. We are a group of active people who do everything we can for our companies and never forget how to hustle. We conduct effective due diligence to protect our investors as it is our fiduciary duty. Moreover, we have a seasoned investment committee who will work together to make decisions so that every investment would be as objective as possible and won’t be swayed by just one member’s excitement over a deal.
Venture capital describes investments in companies that are in the early life-cycle stages. Typically, venture capital finances new, rapidly growing businesses. According to Bangladesh Securities and Exchange Commission (Alternative Investment) Rules, 2015, “Venture capital fund” means an alternative investment fund which invests primarily in non-listed equity and equity linked securities of start-ups with less than 02 (two) years’ operational history or green field companies or emerging early-stage undertakings mainly involved in new products, services, technologies or intellectual property rights based activities or new business models
Visit http://athenaventure.com/ to know more about our directors and management team
What is Private Equity?
Grow Fast, Grow Sustainable
Buy a stake in an entrepreneur’s idea, nurture it for a short period of time, and then exit with the
help of an investment banker
Investment happens at: SEED, EARLY, FOLLOW-ON, BUY-IN, BUY-OUT, BRIDGE CAPITAL etc. stages
Private equity is an investment asset class describing private investments in privately held (as opposed to publicly traded) companies. According to Bangladesh Securities and Exchange Commission (Alternative Investment) Rules, 2015, “private equity fund” means an alternative investment fund which invests primarily in equity and equity linked instruments of potentially high growth non-listed portfolio companies with minimum 02 (two) years’ operational history or to conduct buyouts of companies according to the stated objectives of the fund
Why Athena Venture & Equities Limited? Who else in Bangladesh understand Alternative Investment better than we do? We are in the companybuilding business, and
How the Venture Capital Works?
The venture capital industry has Four Main Players: entrepreneurs who need funding; investors who want high returns; investment bankers who need companies to sell; and the venture capitalists who make money for themselves by making a market for the other three . A work-flow model of Venture Capital is given below;
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Primary Business Address Address Line 2 Address Line 3 Address Line 4 Phone: 029853151 Fax: 029853161 Web: Contact person: 555 555 5555
What is the Logic behind Venture Capital Deal with AVEL? Because we make sure that our Investors get;
Upside potential with downside protection of their investments
Equity linked investment for liquidation preference
Blocking rights, or disproportional voting rights including sale of the company or in the timing of an IPO
Anti-dilution or ratchets clause guarantee original equity position even if the investee firm’s value
How Will AVEL Work?
In short, AVEL will: raise funds, invest them and manage them ensuring superior return for our Investors. AVEL’s business model explains how we work.
We take best care of our Investors
stumbles
In good days, get preference to put additional capital at original investment value/below market price, which gives instant profit
What is the Legal Framework for Alternative Investment in Bangladesh?
Protection through syndication/coinvesting with other firms
The rule is “Bangladesh Securities and Exchange Commission (Alternative Investment) Rules, 2015”
Types of Fund: “private equity fund” or a “venture capital fund” or an “impact fund”
Privately pooled investment vehicle, which is a closed fund
AVEL will collect subscription from Eligible Investor by way of private placement only
Who is an Eligible Investor? As per the Bangladesh Securities and Exchange Commission (Alternative Investment) Rules, 2015, “eligible investors” or “investors” means; Eligible and competent to understand the risk & return potentials to invest Commit capital to any alternative investment fund Be either a registered local of foreign fund manager or a company incorporated in Bangladesh or abroad or a statutory body or a local government authority or a bank or a financial institution or an insurance company or a merchant banker or a
Who are the Stake Holders? Regulatory Body Fund Manager (AVEL) Eligible Investors Trustee Investee Company
Who is a Sponsor of an Investment Fund?
According to the Bangladesh Securities and Exchange Commission (Alternative Investment) Rules, 2015, “sponsor” means one or more eligible investors subscribing initially, jointly or solely, to form a fund.
Who is an Ideal Entrepreneur/enterprise to AVEL? To us an ideal Entrepreneur/enterprise should have positive answers of the following gigs:
We are the big advocate of financial intelligence
stock dealer or an asset manager or an alternative investment fund managed by another fund manager or a registered pension fund or a registered provident fund or a registered trust fund or a registered super annuation fund or a foreign fund or a foreign individual or a high net worth resident (having minimum net worth of taka 2(two) crore certified by the concerned tax authority) or non-resident Bangladeshi individual
Prepared to take on the responsibility?
The business operate in a growth market?
Is the team experienced?
A realistic exit strategy for all shareholders?
Ready to give-up part of the company’s capital to a private investor? Is the business’s development prospect sufficiently ambitious?
Competitive advantage that can be exploited?
Ready to share strategic decision outside of “inner cycle”?
What Will be AVEL’s Revenue?
There will be two-pronged: management fees and carried interest. Management Fee: The management fee is the level
of revenue AVEL will make based on its fund under management (FUM) or asset under management (AUM). This is charged as a percentage of the FUM or AUM on an annual basis, usually not exceeding 4% of NAV of the Fund. The management fee is to be paid on a quarterly basis. The Incentive or “Carried Interest” (Carry): For AVEL’s fund management team to maximize the fund's performance and remuneration for the team's responsibility and expertise in managing the investment. The carry corresponds to a share up to 20%, of the fund's realized profit and is usually paid after the investors have recovered their initial investment and achieved a predetermined “preferred return”, representing a “performance hurdle”. There are many variations in the structure and calculation of carry (e.g. it can be applied on a “fund as whole” or on a “deal-by-deal” basis; it can be stepped, so that the fund manager's share increases with the return the investors obtained; it can be subject to “catch-up”, whereby first the investors achieve their return and then the fund manager catches-up with its carry, etc.). Additionally, to avoid dilution of the incentive, investors frequently require that the carry predominantly benefits the individual members of the fund management team, as opposed to the venture capital firm.
What would be the Return of the Fund Invested?
What are the Basic Features of the Fund?
Name of the Fund: Athena First General Fund
All the stakeholders of Venture Capital get benefited Investors get High Return on their investment in the form of Cash Dividend, which is not possible to earn from existing traditional money market and capital market SEC gets annual fee @ of 0.05% of NAV of the fund Trustee gets an annual trustee fee of max .25% of the realized fund Annual fund management fee 4% for impact fund, up to 3% of a VC fund and up to 2% of
Proposed features* of the Fund;
Type: Close Ended Fund Life and Size of the Fund: 12 Years life, Tk. 200.00 (two hundred) crore only
Fund Manager: Athena Venture and Equities Limited
Face value: Tk. 50.00 (fifty) lac only per Unit Objective: The objective of the Athena First General Fund is to achieve superior risk adjusted return to the unit holders in forms of Capital Appreciation, dividend, interest income by investing the appropriate portion of the Fund in the Capital Market and the Money Market as per the Investment Parameter mentioned in the clause 18 (3) of the Bangladesh Securities and Exchange Commission (Alternative investment) Rules, 2015 to provide attractive dividend payments to the unit holders
Minimum Application Amount: Tk. 5,000,000/ - per application (one unit) for eligible investors Calculated Risk, Superior Return
NAV of a private equity fund, and share up to 20% of the net annual profit of a fund, if the fund can achieve the hurdle rate Investment Fund Manager will receive cash dividend from 2 % to maximum 25% investment of the fund
Transparency: We shall disseminate NAV per unit of the fund semi-annually to the unit holders, the Trustee and the Commission
Target Group: Investor or Investors who are competent to understand the risk & return potentials to invest and commit capital to the fund and be either a registered local or foreign fund manager or a company incorporated in Bangladesh or abroad or a statutory body or a local government authority or a bank or a financial institution or an insurance company or a merchant banker or a stock dealer or an asset manager or an alternative investment fund managed by another fund manager or a registered pension fund or a registered provident fund or a registered trust fund or a registered super annuation fund or a foreign fund
or a foreign individual or a high net worth resident or non-resident Bangladeshi individual
Return to Investor: Distributable realized income, if any, will be distributed as cash dividend in Bangladeshi taka only at the end of each accounting year
Transferability: Any investment in the Fund shall be locked for a period of three years from the date of issuance of the Units. In order to provide an exit route to the Unit Holders after the lock in period, the fund will give an option of selling back the units to the alternative investment fund through periodic repurchase at NAV related prices
Reports and Accounts: Every unit holder is entitled to receive annual report along with the yearly and half-yearly statements of accounts as and when published by the Fund Manager
Tax: Dividend income of the Fund will be tax free up to certain level as permitted by the Finance Act
Committed Amount: The fund shall collect 5% of the committed amount from the investors at the time of commitment which may be forfeited by the fund if the committed amount is not paid-up by any investor upon call.
Our target market is always in a constant state of flux. The only thing constant is that “we invest only in the growth industry”. From our perspective, the following industries have high potential for policy and financial support:; Ceramics & Tiles Light Engineering Agro Sector and Food Processing Fuel & Power IT & E-Commerce Paper Millis, Printing & Packaging
We invest only in the growth industry
Leather & Footwear Sector Tourism and Services Textile & Garments Genetic Engineering Renewable Energy Amusement Park Infrastructure Development Dredging
Apart from that, two dozens of industries including architecture, art and antique, biotechnology, design, fashion design, film and video, interactive laser software and media programs, bicycle, and light engineering are included in the potential list of creative industries to invest.
What Might be Your Round of Investments?
The idea is simple. AVEL makes prudent investment decisions on the investors’ behalf in high potential and innovative investees and make continuous moni-
Low ⇐ Risk Profile ⇒ High
What will be AVEL’s Target Market?
Low ⇐ Funding Needs ⇒ High
toring, and counselling to the prospective venture and its team by closely observing their practices, operations and imposing control over their management. In general, a typical VC firm and its investment funds go through various rounds or levels of investment depending on the life-stage of the investee company. AVEL would be injecting funds to prospective startups and different levels of their development. The fund is therefore categorized accordingly:
Have you conducted an Industry Attractiveness Analysis?
Yes, we have. The following chart presents an industry attractiveness analysis
How do you structure the Investible Fund? The Alternative Investment Rules, 2015 allows us to structure the investible fund as described in the chart
Exit Strategy?
This close-ended fund has a stipulated maturity period of 12 years. The fund is open for subscription only during a specified period at the time of launching of the scheme. Unit Holders can invest in the scheme at the time of the initial issue and any such investment shall be locked for a period of three years from the date of issuance of the units. In order to provide an exit route other than normal course of exit plan to the Unit Hold-
What Would be the Return of A Typical VC Portfolio?
According to an article published in Harvard Business Review (link: https://hbr.org/1998/11/how-venturecapital-works), VC firms don’t earn profit from every investee, despite of this, they achieve the targeted return rate of 25% to 30%. A typical breakout of portfolio performance per $1,000 invested is shown below;
ers after the lock in period, the fund will give an option of selling back the units to the alternative investment fund through periodic repurchase at NAV related prices.
Can You Tell Us More About Your Operational Procedure?
We make sure you exit with a smile
The operation of a venture capital fund can be viewed as a “cycle”. The cycle starts with the “fund raising” process; proceeds through the investment in, monitoring of, and adding value to firms; and concludes as the management team exits successful deals and returns capital to their investors. The cycle renews itself with the management team raising of a new fund. AVEL’s management team would follow a similar pathway.
The “fund raising” process may take up to several months during which the management team seeks commitments from investors. To do this the management team prepares an Information Memorandum, which, in addition to the principal terms and conditions outlined above, AVEL will provide information on: The fund's investment strategy, focus (stage, sector, geographical region, etc.) and rationale; The target size of the fund and its minimum size for first closure, with respective closing dates; The “market” of potential investee companies and the proposed “marketing” strategy to generate “deal-flow”; The management team's experience and capacity
to assess the proposed deals – to perform the required “due diligence”; The decision-making process to ensure the fund is soundly invested; The expected number, individual size and relative importance to the size of the fund of the deals; The management team's attitude to investee companies (e.g. hands-on management, board participation, etc.) and ability to add value, grow the companies over a period of time and realize the investments (“exit”); The reporting to investors (annual reports, meetings, etc.) and the envisaged investor relation committees and advisory board.
What Would be the Dividend Policy and Hurdle Rate?
The accounting year of the Fund shall be January 1st to December 31 The Fund shall pay cash dividend only to the unit holders annually from the distributable profit, if any. The Hurdle rate for the Fund is 8%p.a. We shall not earn carried interest until the unit holders who provided the capital to the fund are repaid their investment and earn a return on their investment at the prescribed hurdle rate Items of fund net income shall be allocated (i) to the unit holders [in proportion to their relative capital contributions] until such time as an immediate distribution to each unit holder of the [amount of such Unit Holder's Capital Account balance, and taking into account prior distributions,] would result in such Unit Holders achieving a pre-tax internal rate of return on such Unit Holder’s actual capital contributions of [eight percent (8%)] per annum, based upon annual compounding, a 360-day year of 12, 30-day months [and no compounding for periods of less than one full year,] (ii) secondly, [solely to the Fund Manager] until the cumulative amount of all income allocated to us, ignoring income allocated to us by virtue of its contributed capital, is equal to [20%] of the cumulative amount of income allocated , unit holders and (iii) thereafter, [20%] to us and [80%] among all unit Holders in proportion to their respective capital contributions.] The Fund shall, as soon as may be, after the closing of the annual accounts, distribute by way of dividend to the holders of the units of the Scheme in accordance with the Rules or as determined by the Commission from time to time. The Fund Management Company shall dispatch the dividend warrants at the expense of the Scheme of the Fund, within forty five days of the declaration of the dividend of the Scheme and shall submit a statement within next seven days to the Commission and the Trustee. Dispatching expenses stated above shall be met from the Fund of the Alternative Investment Fund.
What are the Investment Parameters?
The following Chart explains how we can utilize our investible fund.
AV EL
Disclaimer: Information provided in this document are to address FAQs and may not be used as Venture Capital Investment Guideline
Corporate Head Office: Rupayon Trade Center (Level 3), 114 Kazi Nazrul Islam Avenue, Bangla Motor, Dhaka. Phone: 0255138708 Fax: 0255138709 Web: athenaventure.com
Contact Person: Chief Investment Officer Cell: 8801777331395