Axiom Asia to invest up to 15% of new $1 billion fund in India

Axiom Asia’s new fund, Axiom Asia IV, recently marked its final close, against a target of $750 million

Axiom Asia Private Capital managing partner Chris Loh says the firm has invested in India in all of its last three funds.
Axiom Asia Private Capital managing partner Chris Loh says the firm has invested in India in all of its last three funds.

New Delhi: Singapore-based private equity firm Axiom Asia Private Capital plans to invest up to 15% of its new $1.03 billion fund in India, a top executive said.

The fund—Axiom Asia IV, its fourth private equity fund of funds—recently marked its final close, against a target of $750 million. It seeks to invest in buyout, venture capital (VC), growth capital and other private equity funds.

Axiom Asia has invested in India in all of its last three funds and will invest up to 15% of the new fund in the country, said Chris Loh, managing partner of Axiom Asia. The firm is looking for suitable investment opportunities, said Loh, who also focuses on VC investments in Asia and PE investments in India at Axiom Asia.

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“We have turned bullish on India since 2011... The number of Internet and mobile Internet users is rapidly rising. This creates the potential for high-tech start-ups to create products and services that meet their needs. It is a new angle that was never there in the past. The quality of entrepreneurs has risen in tandem with this trend. The conditions may be right for venture to create very large investment outcomes,” Loh said.

Founded in 2006 as an independent fund management firm, the Asia-focused fund of funds is led by Chris Loh, Alex Lee, Marc Lau and Edmond Ng. It has offices in Singapore and Hong Kong.

“We have invested in both growth funds and venture funds. There has been a large number of new venture firms founded in the last two years. With so many venture firms working hard to help start-ups grow, I’m quite confident that some of them will be very successful eventually,” added Loh.

“Funds that we invest in should have a reasonable probability of returning 2x cost and a net IRR in excess of 20% p.a,” Loh said.

About two dozen private equity industry executives are on the road to raise up to $2 billion for their new funds, Mint reported last July, indicating limited partners (LPs) believe in the emerging India story.

Some of the new venture funds are Stellaris Venture Partners, Quona Capital, Montane Ventures, Venture Catalysts, Rainmaker Ventures and Pravega Ventures.

“We are very interested in the new generation of tech companies that the venture funds have been uncovering. They are able to take advantage of the increasing Internet penetration to easily access customers like never before in India. We are also interested in growth funds that have the ability to uncover emerging businesses that need expansion capital,” he added.

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It has earlier made commitments to Hong Kong-based secondaries including China Everbright Investment Management, NewQuest Capital Partners and CDH Investments.

The latest fund is slightly smaller than Axiom Asia III, which closed in March 2012 at $1.15 billion. The firm’s first fund closed in 2007 at $440 million, while its second fund closed in 2010 at $950 million. Now, Axiom Asia manages four funds, with total commitment of over $3.5 billion.

Axiom makes secondaries purchases through its funds of funds as well as co-investments and direct investments, apart from its main activity of investing in private equity funds across buyout, growth capital and venture capital. The firm focuses on Japan, Korea, China, south-east Asia, Australasia and the Indian subcontinent.

Axiom’s funds’ limited partners include endowments, foundations, family offices, pensions, and financial institutions from across the world.

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