Mumbai: Rajat Gupta, former director at Goldman Sachs Group Inc. and founder of private equity firm New Silk Route Partners LLC (NSR), has been released from jail after a two year sentence for insider trading in the US. The worst may be over for Gupta, but NSR, the fund he founded, continues to struggle.

To be sure, NSR has completely distanced itself from Gupta. “Rajat Gupta resigned from NSR in March 2011 and has not been involved in the management of the firm for over half a decade," said a spokesperson for NSR. The fund’s troubles now stem from its attempt to return the money from its maiden fund to investors.

New Silk Route, a $1.4-billion venture capital fund, invested more than $1 billion in India across 17 portfolio companies.

The focus at the fund for some time now has been to exit investments and return capital to investors. NSR is looking to return at least $500 million to its investors by 2016 before it looks to raise a second fund, CEO Parag Saxena said in an interview last year. A spokesperson emphasized this: “NSR remains focused on building on its successful 2015 and continuing to deliver liquidity events for our limited partners in 2016."

Limited partners or LPs are investors in private equity and venture capital funds.

NSR has part exited its investments in Ortel Communications Ltd and VRL Logistics Ltd. NSR also made an exit from Augere Wireless Broadband India when Bharti Airtel bought a 74% stake in the firm in December. In February last year, NSR sold a 49% stake in PNB Housing Finance, held by its subsidiary Destimoney Enterprises Private Ltd for an undisclosed amount.

NSR’s portfolio now includes 9X Media Private Ltd, Reliance Infratel Ltd—a subsidiary of Reliance Communications Limited, Rolex Rings Pvt Ltd, Kiran Energy Solar Power Pvt Ltd, Ortel Communications Ltd, Nectar Lifesciences Ltd, Coffee Day Resorts Pvt Ltd, KS Oils Ltd, Ascend Telecom Infrastructure Pvt Ltd, Varsity Education Management Pvt Ltd, VRL Logistics, Vasudev Adiga’s Fast Food Pvt Ltd and South Asia Gastronomy Enterprises LLC.

The fund has not made any new investments since 2014. Its last deal in India was in September 2013, when it acquired Mumbai-based chain of restaurants Moshes Fine Foods Pvt for an undisclosed amount.

In the 2012-2016 period, NSR made six investments worth $113 million and four exits worth $66.5 million, according to VCCedge data.

But the fund, like many other funds, has a few lemons in its portfolio.

For instance, NSR has been struggling to sell its controlling stake in Bollywood channel 9X since 2013. 9X was launched by former STAR India CEO Peter Mukerjea and his wife Indrani in 2006 as INX Media and when the founder quit in 2009, NSR increased its stake to 80% and renamed it as 9X Media.

NSR also holds around 9% stake in KS Oils. The fund invested about 135 crore in KS Oils in 2009, by paying 48 per share. The stock now trades below 1.

NSR also holds a 26% stake in auto component manufacturer Rolex Rings Pvt. Ltd. where it invested $40 million in 2007. NSR has been attempting to exit the company for the last two years and in 2015, the company mulled an initial public offering. The plans, however, are still to fructify.

NSR also has a minority investment in Reliance Infratel Ltd. Another large investment where NSR is considering an exit is Ascend Telecom Infrastructure Pvt. Ltd, of which it owns two-third.

Close