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Arvind Agarwal
Founder & CEO, C4D Partners |
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With over two decades of experience in the alternative investment domain, Arvind has established expertise in financial planning and strategy, He has a keen sense for identifying socially driven investment opportunities that demonstrate the potential to generate greater good for people and the planet.
As the CEO at C4D Partners, he heads the global operations of the C4D Asia Fund and takes pride in supporting and building organizations that create a positive difference for society and simultaneously generate wealth for its stakeholders, As a representative of C4D Partners, Arvind also serves as a director and advisor for around 10 portfolio companies, wherein he oVers strategic guidance to the companies.
Before joining C4D Partners, Arvind worked with organizations like Abu Dhabi Capital Management, Goldman Sachs, and Evalueserve India Private Limited.
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1 Could you help us understand your current portfolio in India? What are the major sectors or segments across which your Indian portfolio is distributed?
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Across geographies, C4D Partners has invested in companies whose business models are woven around impact. Our funds are sector agnostic, enabling us to diversify our investments and reduce risks for our investors. Currently, with 11 active investments, our India portfolio also comprises such impact-driven ventures across sectors such as agri-processing, financial inclusion, renewable energy, waste management, skilling and education, and last-mile logistics/services.
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2 How does C4D Partners support and add value to its portfolio companies beyond capital investment?
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At C4D Partners, we understand that growing businesses need more than just capital investment. In addition to our funds, C4D Partners also manages a Portfolio Support Program (PSP). The program operates alongside our funds and is a separately structured and financed facility that allows us to offer business and technical assistance to our investee companies. The PSP focuses on augmenting the financial sustainability and organizational resilience of investee companies by potentially reducing risks and improving company performance.
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3 Can you give us some examples of successful investments made by C4D Partners, and what made these companies stand out?
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As impact investors, we realize that a successful investment strikes a balance between impact and financial returns. We structure our investment approach to achieve this balance.
For instance, you may look at our portfolio company in the waste management sector, Saahas Zero Waste (SZW). SZW offers comprehensive waste management solutions and operates on the principles of circular economy. In FY2018-19, C4D invested USD 567k in SZW in two tranches. At the time of the C4D investment (FY2018-19), SZW was operating at a Net loss. In FY2020-21, the company turned Net profitable, and since then, the company has remained net profitable every year.
In FY2022-23 alone, SWZ managed 43,849 Tons of waste. The company also pays its employees minimum wages that are comparatively higher than the minimum wage mandate of the state government, which is quite unusual in a largely unorganized sector like waste management. Moreover, it also focuses on employing more women in its supply chain (59% of the SZW workforce is female), breaking the norms of the male-dominated waste management sector.
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4 How does C4D Partners measure and track the impact of its portfolio companies beyond financial returns?
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We mainly have two sets of impact metrics. Firstly, a few pre-defined standard KPIs (i.e., percentage of women ownership, percentage of women on board, percentage of women employees) across all portfolios. Secondly, sector/business model-specific impact metrics (i.e., number of candidates trained, transaction value with small-holder farmers, etc.). These metrics are based on IRIS indicators defined by the Global Impact Investment Network (GIIN). We track these metrics from the time of investment to ensure compliance. We have also migrated our impact assessment process to a web-based reporting platform on which investees can report impact data directly.
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5 What are your views on the impact investing market in India? How does it compare with other emerging markets where you invest in? Could you share C4D Partners’ investment strategy in India for the foreseeable future?
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Being a vast and diverse market, India has enormous opportunities for investors and businesses to generate significant returns and meaningful impact. In recent years, the impact investing market in India has witnessed exponential growth. However, industry stakeholders must realize that any change requires time, and therefore, if we want to generate meaningful social or environmental outcomes, impact funds will require patient capital.
We are happy to share that, compared to our investments in other emerging markets, the performance of our India portfolio has been remarkable. We have been able to create a notable impact across the country with our investments while also supporting our companies to become sustainable and profitable.
C4D Partners has always focused firmly on the Indian market, with a dedicated team for managing its India portfolio. Strengthening our focus on India, we have launched Fund-2, the C4D Bharat Shubharambh Fund, a USD 75Mn India-dedicated venture. We are currently fundraising for Fund-2 and seek to invest in growing Indian companies.
In C4D Fund-2, we will maintain our investment approach to balance impact and financial returns by investing in the VC stage while managing our portfolio with PE underwriting. This approach allows us to focus on each of our investee companies, reducing the mortality rate of the portfolio and consequently delivering more meaningful impact for the longer term by helping them sustain profitably.
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