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Newly Established Asset Management Business Investment Opportunity in Bangalore, India

Company developing trading algorithms to manage funds for brokers and UHNI clients seeks investment.
This Business is on a Premium Plan
Established 0-1 year(s)
Employees 10 - 50
Legal Entity Limited Liability Partnership (LLP)
Reported Sales USD 360 thousand
Run Rate Sales USD 360 thousand
EBITDA Margin 24 %
Industries Asset Management
Locations  Bangalore
Local Time 4:59 PM Asia / Kolkata
Listed By Business Owner / Director
Status Active
Overall Rating
Seeking Investment
USD 400 thousand for 11.0% stake (Native Currency: INR 30,000,000)
Reason: - Looking for active business partners for expanding the business and would like to invite an invest... View More
Includes physical assets worth USD 13 thousand
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Business Overview

- We manage funds for our clients using our trading algorithm developed by the promoters using their expertise in the field.

- 4 years of R&D went into the development of this algorithm.

- In simple terms, clients subscribe to use this algorithm but our revenue model is not based on subscription but we are paid a commission of 20% on profits.

- Clients are brokers and UHNIs, and we have 3 clients at the moment.

- We are managing INR 140 crore of exposure with approximately INR 47 crore of margin. In the next 2 months, we are expecting another INR 60 crore of assets under management exposure.

- Have delivered 24% ROI per annum with a maximum risk of 8% on the exposure.

- Under our algorithm, 3 times leverage can be used. For example, if someone wants to trade INR 150 crore worth of exposure, they require only INR 50 crore of margin, so their ROI percent and max risk on exposure will be multiplied 3 times.

- As of now, we are not registered under SEBI but looking to apply for an AIF CAT III License within 1 year time frame. With this license, we will have many tax benefits and higher margins.

- Valuation is based on the following parameter: with the current expansion rate, without adding any new clients and having INR 200 crore of exposure on book, generating ROI at 24%, we will be generating INR 48 crore profit for the clients. On profit, we will be sharing 20% which will be around INR 9.6 crore per annum to the company. Investor buying 11% stake at INR 3 crore can recover initial investment in 3 years time frame.

- Moreover, if we scale our business to 5 times which is highly possible, then Investment can be recovered in a single year.

- Recently, we have sold 5% stake at INR 1.5 crore to an investor.

Products & Services Overview

- Trading products: NSE intraday trading in indexes and positional trading. Profits in trading can be expected on yearly basis.

- Investment products: Long investments in equity with a minimum holding for 7 years can expect 24% CAGR with a maximum drawdown of 30% on long investments only.

- Combination of trading and investment: We can expect 36% CAGR with a maximum drawdown of 12%. The risk adjusted return will increase when you combine both the trading and investments.

Assets Overview

Intangible assets include IP rights of the proprietary algorithms and physical assets include office infrastructure and computers.

Facilities Overview

We have a rented office of 1,500 square feet in Bangalore and we are sharing space at a friend's office in Goregaon West, Mumbai.

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Disclaimer: SMERGERS is a regulated marketplace for connecting business sell sides with investors, buyers, lenders and advisors. Neither SMERGERS represents nor guarantees that the information mentioned above is complete or correct.
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