The Category II AIF can potentially raise an additional Rs 500 crore through the green shoe option.

The "Finserv Fund" will utilize the funds to provide loans to six diverse sectors, including small businesses, affordable housing, vehicle finance, agriculture finance, microfinance, and consumer finance. This aligns with Northern Arc's mission to improve financial inclusion and economic growth. 

The AIF aims to invest in 45-55 entities over its four-year cycle and deliver an internal rate of return of 14%-14.50% to investors. The investment strategy focuses on higher risk-adjusted returns and regular cash flows by investing in a diversified pool of debt securities of financial institutions.