New Delhi: In a difficult fund-raising environment, leading Indian private equity fund India Value Fund Advisors (IVFA) has raised $725 million (Rs3,516 crore) for its fourth fund. A spokesperson for India Value Fund Advisors confirmed the development to VCCircle.com.
PEI Asia, a private equity tracker based in the UK, first reported that IVFA has achieved the close of the fund.
Achieving the close of a fund of this magnitude for Indian markets is significant, given tight liquidity, limited investor interest and cautious markets. The competition for fund-raising is also tough. There are 78 India-focused funds on the road looking to raise $24 billion, according to data compiled by Prequin, a UK-based fund tracker.
There are 78 India-focused funds on the road looking to raise $24 billion, according to data compiled by Prequin. Ahmed Raza Khan / Mint
There are about 117 pan-Asia private equity funds—which have India as one of their geographies—currently targeting to raise aggregate capital of $59.2 billion.
Some of the leading India-focused funds that have managed to close this year are NYLIM Jacob Ballas Capital, Actis and Avigo Capital Partners.
IL&FS Investment Managers, which was able to announce the final close of both its real estate and growth equity funds, received a mixed response. While its real estate fund raised $895 million, exceeding its target of $750 million, its growth equity fund had to close at $225 million, way short of its $400 million target.
Actis, which focuses on emerging markets, raised $2.9 billion, of which around $1 billion is expected to come to India. NYLIM Jacob Ballas raised a $440 million growth fund, while Avigo Capital and CX Partners were able to announce the first close of their funds.
IVFA, which manages $610 million across its three previous funds, usually buys controlling stakes in the companies it invests in. The firm also has a strategy of appointing business managers on the boards of its portfolio companies in order to have a better control over the running of these firms. Some of the earlier companies it invested, turned around and exited are Shringar Cinemas (now called Fame India Ltd), Trinethra Superretail Ltd, and TTK Healthcare TPA Pvt. Ltd. Its current portfolio includes 11 companies such as Music Broadcast Pvt. Ltd (that runs Radio City), taxi fleet operator V-Link Travel Solutions Ltd and Kerala-based hospital chain DM Healthcare.
In May, the fund picked up a more than 51% stake in private container trains operator Innovative B2B Logistic Solutions Pvt. Ltd for around Rs200 crore. It had also recently bought a controlling stake in Bangalore-based Atria Convergence Technologies Pvt. Ltd, which launched IPTV (Internet protocol television) services in the city in February, for Rs450 crore.
IVFA has a sector-agnostic approach. The key sectors that it plans to invest in from its fourth fund include pharmaceuticals and healthcare, retailing and supply chain management, outsourced services and media and entertainment.
IVFA had closed its third fund at $400 million in January 2007. Around 30% of the third fund is yet to be deployed.VCCircle.com