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A Category I Alternative Investment Fund built to back India's most promising small and medium enterprises.
Why SME Fund
SMEs are often the backbone of economies, especially in developing countries. They contribute significantly to GDP — in the U.S., SMEs account for about 44% of economic activity, per the SBA. They drive innovation, create jobs, and stimulate local markets.
SMEs contribute approximately 30% to India's GDP and account for nearly 45% of the country's industrial output. They are critical drivers of economic growth, especially in a developing economy like India. SMEs are the second-largest employer in India after agriculture, providing jobs to over 120 million people.
SMEs contribute about 50% of India's total exports, with key sectors including textiles, handicrafts, and engineering goods. As India strengthens its position in global trade, SMEs are poised to benefit from increasing demand. With over 57 million MSMEs registered in India as on Dec 2024, they form the backbone of the industrial and service sectors, supporting both urban and rural economies.
The Indian government has introduced several initiatives to bolster SMEs, such as the Make in India campaign, Atmanirbhar Bharat (Self-Reliant India), and schemes like the PMEGP (Prime Minister's Employment Generation Programme) and MUDRA loans. Tax benefits, subsidies, and easier access to credit make SMEs an attractive investment option, reducing financial risk for investors.
Smaller companies can pivot quickly, adapting to market changes faster than large corporations. They're often where disruptive ideas emerge — think tech startups or niche manufacturers. For investors, SMEs offer a way to diversify a portfolio. While they carry higher risk than blue-chip stocks, they also have potential for outsized returns, especially if you catch a growing business early. Governments offer incentives (tax breaks, grants) to encourage SME investment, reducing risk for investors.
Features
The Money Plant Capital SME Fund emerges as a standout choice among Alternative Investment Funds (AIFs), offering investors a compelling avenue for achieving robust returns in today's dynamic market. This fund is driven by the exceptional expertise of its investment team, whose more than two & half decades of industry experience are complemented by a meticulously crafted and time-tested investment strategy.
What sets the fund apart is its blend of innovation, adaptability, and disciplined risk management — spotting and seizing emerging market trends, swiftly adjusting to evolving conditions, and leveraging sophisticated tools to minimize downside risks. Its distinctive investment approach is further defined by a set of unique characteristics:
Focuses on IPO-bound or listed companies, particularly profitable SMEs in high-potential, unorganized sectors.
Prioritizes businesses addressing scalable real-world challenges with upscaling potential of 3x to 5x within 5 to 6 years or more.
Targets Tier II and Tier III cities, tapping into underserved yet promising markets.
Invests in successful, growing franchise models and companies with strong footholds in non-cyclical, niche markets fueled by resilient, long-term growth drivers.
Emphasizes cash-generating, low-capital-intensive businesses with strong profit margins and high returns on capital employed or equity.
Seeks firms with diverse, global customer bases; technical expertise or intellectual property; and essential, non-discretionary products/services with pricing power.
In SME AIF, a minimum investment of 75% has to be done in unlisted or proposed-to-be-listed SME companies, while up to 25% may be allocated toward all other segments/entities, depending on market opportunities identified by the Investment Committee. The fund also retains flexibility to invest in companies incorporated outside India, as permitted under AIF regulations, at the discretion of its seasoned management team.
With its highly experienced investment committee, forward-thinking approach, and focus on sustainable growth, the Money Plant Capital SME Fund offers a rare and attractive opportunity for discerning investors.
Enquiry Now →Risk Management
Addressing risk requires robust risk management strategies, which involve identifying, assessing, and mitigating risks — this is where the expertise of top fund management lies. We use diversified strategies to manage risk:
Spreading investments across different asset classes, sectors, industries, and geographic regions.
Purpose: Reduces the impact of poor performance in any single investment or sector, enhancing overall stability.
Strategic distribution of investments among different asset classes (high beta, low beta & zero beta assets).
Purpose: Balances risk and return based on market conditions and investor risk tolerance, avoiding overexposure to any single asset class.
Setting predetermined price levels at which specific securities will be sold to limit losses.
Purpose: Prevents significant losses if an investment's price falls below a certain threshold.
Evaluating the portfolio's performance under various adverse scenarios (market crashes, economic downturns).
Purpose: Helps assess how the portfolio might perform under extreme conditions and make adjustments to mitigate losses.
Ensuring the portfolio maintains sufficient liquidity to meet investor redemptions and unexpected market needs.
Purpose: Avoids selling illiquid assets at distressed prices, preserving portfolio value during downturns.
At Money Plant SME Investment Fund, we are cognizant of the risks associated with the asset class we operate in. We follow a disciplined approach to portfolio construction and, as value investors, all our investment decisions factor in a significant margin of safety. Our in-house research team, with its process-driven approach, analyses and monitors companies to identify and mitigate company-specific risks, including corporate governance concerns.
Strategy
The Money Plant SME Investment Fund adopts a sector-agnostic approach, casting a wide net to capture opportunities across technology-driven enterprises and broader consumption-driven themes. The fund strategically zeroes in on sectors poised for a rare blend of accelerated growth and enhanced profitability among their leading players, ensuring a balanced pursuit of opportunity and stability.
Philosophy
The Money Plant SME Investment Fund aims to make early investments in high-potential growth businesses that have a proven ability to generate revenue and a well-thought-out strategy for scaling — SMEs eager to secure the resources needed to accelerate their expansion and maintain momentum over the long haul.
This strategy positions the fund to support businesses blending established success with ambitious, sustainable growth plans, underpinned by strong leadership and principled governance.
Focus
The Money Plant SME Investment Fund is tailored to deliver both growth capital and strategic guidance to SMEs unlisted & poised for listing on stock exchanges — targeting companies with strong potential for expansion and profitability. Investments will be directed toward Indian companies in the manufacturing and services sectors, specifically within the following domains:
This focused approach ensures the fund nurtures high-potential SMEs across key industries, fostering their growth and market readiness.
Know More →Got Questions?
The Money Plant SME Fund is created by Money Plant Capital Trust Category I Alternative Investment Fund (AIF) – SME Fund, registered with SEBI effective [Month Day], 2023, under registration number IN/AIF1/23-24/xxxx. Our fund is dedicated to raising capital from investors to invest in small and medium enterprises (SMEs), allocating units to investors in return for their contributions.
Our office addresses are:
Registered Office: K-37/A, Basement, near Kailash Colony Metro Station, Kailash Colony, New Delhi, Delhi 110048
Marketing office: 1st Floor, 824, Sector 14, Gurugram, Haryana – 400013. For contact, you can email us at info@artharich.in and for more details, please visit the contact us page by clicking here.
Our team is constantly evaluating SME companies. After understanding the business model and founder's vision, we do legal and financial due diligence to make sure that the company has no red flags.
Once a company is selected to be part of the investment portfolio and fund is allocated, the fund will issue units to the investors at a Net Asset Value in proportion to the amount invested, and these units will be visible when you login to your Investor Portal.
Post your investment, we provide periodic key business updates and various financial metrics. We also provide a periodic unit statement and half yearly as well as yearly valuation report of investments to all investors.
On timely intervals we will also be conducting Zoom meetings with promoters of SME companies where we are invested to discuss queries & their future growth plans. Investors can also join and send their questions that we can ask on their behalf.
We endeavour to create long-term relationships with all our stakeholders while practicing a disciplined approach to investment.
Also, these above points are general guidelines we follow and not strict rules. There could always be exceptional opportunities where we may use different Investment parameters.
We will strategically invest in a carefully curated portfolio of 10–20 companies that align with our specific parameters. Our approach avoids spreading capital across too many companies, ensuring we can effectively manage the portfolio even in uncertain conditions.
The Alternative Investment Fund shall accept from an investor, an investment of value of one crore rupees or more.
The Alternative Investment Fund may raise funds from any investor whether Indian, foreign or non-resident Indians by way of issue of units.
Please fill out the joining form. You can redirect to our joining form by clicking here. Our investor relations team will reach out to you.
Documents Required for Onboarding
For Individuals – PAN Card, Aadhaar Card, Cancelled cheque
For Corporates – Please reach out to us on info@artharich.in and we will share the list of documents.
SME fund investing typically resides in the medium-to-high risk category, reflecting the vibrant volatility, liquidity dynamics, and inherent uncertainties that characterize smaller enterprises. Far from being "unsafe," this asset class presents a compelling opportunity for those who value diligence and strategic oversight in managing risks. For investors with a strong capacity for risk and a focus on long-term growth, SME funds offer an attractive avenue to achieve robust returns, making them a potentially rewarding component of a well-considered portfolio.
Liquidity refers to how quickly and easily an investment can be converted into cash without significantly affecting its value.
SMEs require time to grow, scale, and become profitable enough for an exit (e.g., acquisition or IPO). The fund manager needs time to identify promising SMEs, invest, nurture them, and then exit profitably. This process often extends the horizon to 3 years or more.
SEBI requires a minimum of 3 years for close-ended Category I AIFs. However, SME-focused funds often have longer horizons — commonly 5 to 7 years.
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