India-focused funds are carrying approximately $9 billion in dry powder, similar to 2016 levels, reaffirming the potential for investments in the Indian market, says Bain and Co.
Mumbai: Private equity firm Greater Pacific Capital (GPC) has received commitments of $300 million for the first close of a $700-million India-focused fund, said two people aware of the development.
The India-and China-focused private equity company, which had raised a $400-450 million fund in 2007-08, was set up by Ketan Patel and Joe Sealy, both former executives of Goldman Sachs’ investment banking division, in 2005.
“Greater Pacific Capital has hit a first close of $300 million for its second India fund. It had started marketing efforts last year. The firm is looking to raise $700 million for the fund, which will also have co-investment commitments from limited partners (LP), taking the overall investable corpus to over a billion dollars. The final close of the fund is expected by end of the year," said one of the people mentioned above, requesting anonymity.
The first fund has already returned more than the capital it had raised, he added.
From the first fund, GPC had invested in several companies, including in Edelweiss Financial Services Ltd and Torrent Pharma Ltd.
“The new fund will focus largely on investing in Indian companies having a global growth angle, unlike a lot of other PE firms which are focused on domestic consumption themes. It will look at sectors such as financial services, technology, pharma and services," said the second person, also requesting anonymity.
“GPC is a growth capital firm and it prefers picking up significant minority stakes, partnering with the entrepreneurs to create value. However, it is not that they are averse to control transactions."
It will deploy $40-70 million in each portfolio company.
For its latest fund, GPC has received anchor commitment from a large North American pension fund, besides other institutional investors from the US and Europe, the second person added.
An email query to Greater Pacific Capital seeking details of the development did not elicit any response.
India-focused funds have seen strong traction in fund-raising activities in recent times. According to consulting firm Bain and Co.’s India Private Equity Report 2018, fund-raising in Asia-Pacific rose to match the 2015 levels, growing 6% from 2016 to 2017.
“India continued to be an attractive destination for investments, as India-focused funds increased 48% in aggregate to $5.7 billion. India-focused funds are carrying approximately $9 billion in dry powder, similar to 2016 levels, reaffirming the potential for investments in the Indian market," the report added.
Fund-raising was helped by new asset classes and fund types, Bain said, adding that alternative investment funds showed robust growth in 2017 and raised about $5.1 billion to date, compared with $2.4 billion in 2016.