BackEverstone Capital raises $700 mn for its third fund
The money was raised from global investors including the International Finance Corporation and the University of Texas endowment fund
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Mumbai: Everstone Capital Advisors Pvt. Ltd, the India- and South-East Asia-focused private equity (PE) firm, has raised $700 million from global investors for its third fund to invest in consumer goods companies, and healthcare and financial services providers, two people with knowledge of the development said.
The money for Everstone Capital III LP was raised from global investors including the International Finance Corporation (IFC), an arm of the World Bank, and the University of Texas endowment fund, said the two people, who requested anonymity. A formal announcement is expected next week.
Founded in 2006 by Atul Kapur and Sameer Sain, a former joint venture partner of Kishore Biyani in Future Capital Holdings Ltd, Everstone Capital has raised two funds so far—the $580 million Everstone Capital Partners II and $425 million Indivision India Partners.
The PE firm has invested in companies including fashion house Ritu Kumar, VLCC Healthcare Ltd, Internet services provider Tikona Digital Networks, beauty saloon chain YLG India, restaurant operator Pan India Food Solutions Pvt. Ltd (Blue Foods), food products maker Capital Foods Ltd, wind-turbine maker Regen Powertech Pvt. Ltd, non-banking financial company IndoStar Capital Finance Pvt. Ltd, healthcare services provider Global Hospitals Group and wine maker Sula Vineyards.
“More than 75% of the new fund was from existing investors," said one of the two persons cited above. Everstone will use the new fund to invest in businesses such as consumer goods and services companies, and healthcare and financial services providers.
An Everstone spokesperson declined comment.
According to the second person, Everstone has received demand for co-investments over and above the fund size. A co-investment is simply an investment made directly by Limited Partners, or LPs (the ones who invest in the private equity fund), in the company in which the fund is investing.
“Everstone will close at $700 million, but there will be a co-investment capability of almost $300-400 million for larger deals," this person added.
Everstone closed its last fund at $580 million, but with co-investments, the fund has invested nearly $1 billion, the first person said.
“Certain limited partners are happy to co-invest along with the fund for larger investments to ensure the fund does not miss opportunities beyond a certain ticket size. We have seen that in the past although it is not very common in practice," said Pramod Kumar, managing director of Barclays Capital India.
Everstone is one of the largest PE investors in the fine-dining business in India.
Everstone owns a 75% stake in F&B Asia Ventures, in which the remaining 25% is held by Belgian family office Verlinvest SA.
F&B Asia Ventures, an investment holding company with a pan-Asian food and beverage platform, owns assets such as Pind Balluchi, Harry’s Group and The Disgruntled Chef, and runs a local franchise of Domino’s in Indonesia and Burger King in India.
Everstone owns and operates several other brands under its Cuisine Asia and Blue Foods subsidiaries—Bombay Blue, Copper Chimney, Gelato Italiano, Noodle Bar, Spaghetti Kitchen and The Coffee Bean & Tea Leaf.
Although Everstone has a significant presence in the consumer services space, its presence in other areas such as healthcare is negligible and the firm is looking for more opportunities in this space.
On 6 July, Mint reported Everstone’s interest in acquiring Hyderabad-based CARE Hospitals through a consortium with PD Hinduja Hospital, the hospital arm of the Hinduja Group. The deal is in the range of about $252 million (about ₹ 1,600 crore)
Like Everstone, a handful of India-focused PE firms are busy raising their next round of funds. The firms include IDFC Alternatives Ltd ($400-500 million), India Value Fund Advisors ($700 million) and Renuka Ramnath’s Multiples Alternate Asset Management ($600 million).
“There is a growing interest in India as an investment destination by global LPs. They are optimistic about the long-term potential of the Indian growth story and are backing quality private equity funds with a proven track record in the Indian market," said Pankaj Kalra, senior executive director, Kotak Investment Banking.
Fund-raising in the Asia-Pacific region increased 11% in 2014, while India-focused funds grew more than 110%, said a report by Bain and Co. in May.
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