Mumbai: Indian private equity (PE) firm CX Partners has raised about $250 million for its second sector-agnostic fund, marking its first close, two people aware of the development said on condition of anonymity.

CX Partners is targeting a corpus of $400 million for the fund, said one of the two people cited above. The final close is expected by mid-2018, the person said.

Launched in 2009 by Ajay Relan, former India head of Citi Venture Capital International, CX Partners raised its first fund of $500 million in 2010. It was among the few PE firms that managed to raise money in the tough aftermath of the 2008 global financial crisis.

CX Partners had planned to launch its second sector-agnostic fund in 2012, but the plan was put on hold until 2016, when it started meeting investors to raise money, the second person said.

Jayanta Basu, managing partner at CX Partners, declined to comment.

The private equity firm has invested in companies including Barbeque Nation Hospitality Ltd, Sapphire Foods India Pvt. Ltd, Ujjivan Financial Services Ltd, South Indian Bank Ltd, Karur Vysya Bank Ltd, Thyrocare Technologies Ltd and Minacs Ltd, an outsourcing services provider.

Fundraising has accelerated as limited partners (LPs), who provide capital to venture capital and PE firms, turn positive over the Indian economy.

“Ease of doing business in India, enhancement in our credit rating, a multitude of pro-business regulations are all very positive signs and would raise India’s profile amongst the LP community," said Sanjeev Krishan, transaction services and private equity leader at PwC India. “GPs (general partners) with a good track record, particularly exit activity, will find this a good time to raise money," said Sanjeev Krishan, leader of the transaction services and private equity practice at PwC India.

Last week, Moody’s Investors Service raised its India sovereign rating by one notch from the lowest investment grade. India’s ranking in the World Bank’s ease of doing business survey rose by 30 places to the 100th position.

In 2015, CX Partners saw a leadership change as co-founder Relan stepped down and named Basu as managing partner with responsibility for the firm’s day-to-day operations.

CX Partners has been on exit mode from investments out of its first fund; it has made a number of partial exits through recently launched initial public offerings by portfolio companies.

CX Partners sold about a 5% stake in Security and Intelligence Services (India) Ltd, or SIS, through its IPO in August. CX had bought a 15.5% stake in SIS in 2013.

Last year, the IPO of CX Partners-backed Thyrocare Technologies Ltd was subscribed 72 times and provided a good return for investors. CX Partners-backed restaurant chain Barbeque Nation is also set for an IPO through which CX Partners is planning a partial exit. CX Partners exited Minacs when it was sold to Synnex Corp. for $420 million in 2016. CX Partners is also in talks to exit its investment in surgical equipment maker Sutures India Pvt. Ltd.

Another homegrown PE fund is also tapping the changed fundraising environment.

Renuka Ramnath-led Multiples Alternate Asset Management Pvt. Ltd plans to start a roadshow for its third fund next year.

Multiples, which raised its first fund of $405 million in 2011, last year achieved the final close of its second fund of $700 million (including a $150 million co-investment pool).

Its second fund is already 55% invested and over the course of this financial year, Multiples is expect to invest around 20% of the corpus, Mint reported in June citing Prakash Nene, managing director and chief financial officer at Multiples.

Funds allocated to India increased by 8% in 2016 over the previous year.

At $9 billion, Indian dry powder remained at levels similar to 2015, indicating no dearth of capital for good-quality deals, according to India Private Equity Report 2017 by Bain & Co.

Results from the Bain Private Equity Survey indicate that general partners, or money managers, flush with money, may not have given fund-raising their full attention in 2016, when their priorities were buying companies and working on existing portfolio firms.

Deals and portfolio management will continue to be priorities, but many GPs indicated they will be refocusing on fund-raising as well. Close to 70% said they will launch a new fund in the next 12 to 24 months, the survey showed.

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