Mumbai: Mumbai-based private equity (PE) firm Tano India Advisors Pvt. Ltd, which is raising a $150 million (around Rs 680 crore) fund, has garnered an initial tranche of $54 million, with California-based Charles E. Johnson and family as the anchor investor, Tano’s managing director Carlton Pereira said.
Johnson is a former chief executive of investment firm Franklin Templeton Worldwide. Apart from the Johnson family, Hong Kong-based Asia Alternatives Management Llc also invested in the Tano fund. Asia Alternatives is currently managing two funds—the $515 million Asia Alternatives Capital Partners Lp and $950 million Asia Alternatives Capital Partners II, Lp.
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“We did the first close by November-end and it took roughly eight months,” said Pereira, who started the fund in 2007 along with his partner Hetal Gandhi.
Tano India is aiming for its second close by March 2011.
“We are actively evaluating deals and expect to make the first investment from this fund by the first quarter of next (fiscal) year,” said Pereira, a former head of corporate finance at KPMG India Pvt. Ltd.
This is the second fund being raised by Tano India. It raised $100 million in April 2007 that has been fully deployed across 10 companies. The last investment is in the final stages of closure. Pereira declined to give more details, but said the deal was in the range of $15-18 million.
Other investments made by the firm include $12.45 million in Icomm Telecommunications Ltd, a maker of telecom equipment; $10 million in Virgo Engineers Ltd that makes flow control valves and systems for oil explorers; $7.4 million in Anil Printers Ltd; and $15 million in ABG Motors Ltd.
Explaining the kind of investments the fund will make, Pereira said: “The opportunity set has expanded, but the core strategy is the same. So apart from sectors like ancillaries to infrastructure, manufacturing and services, we will look at sectors like inputs to agriculture and post-harvest management, services that are geared towards efficiency and automation of industry and personal services.”
According to Avinash Gupta, head of financial advisory at Deloitte Touche Tohmatsu India Pvt. Ltd, the fund-raising period has increased for PE funds and that will continue to be the case. Limited partners, as investors in PE funds are known, are waiting for some returns on past investments before they commit more money, he said.
For funds that have closed this year, the average time taken to complete fund-raising was 19.8 months, double the average in 2004, according to data from Preqin Ltd, a UK-based research firm that tracks the alternative investment market.
Tano has exited two of its portfolio companies this year, making aggregate returns of three times its investment. It exited Shilpa Medicare Ltd in August by selling its stake in the open market and exited Ravin Cables Ltd in January by selling the stake to a strategic investor—Italy-based cable manufacturer Prysmian Group. Four of Tano’s portfolio firms, including Icomm and Virgo Engineers, will list in 2011.
Vibhor Mehra, principal at SAIF Partners, an Asia-focused PE firm, said that for established PE firms, raising money will be easier compared with 2009. “Investors have information now... They are placing their bets on funds that have track records and have shown superlative returns,” he said.
Graphic by Yogesh Kumar/Mint