Multiples PE plans to raise new $500 million fund3 min read . Updated: 02 May 2014, 12:11 AM IST
So far, Multiples has invested about 71% of the $405 million it raised in its maiden fund in 2010
Mumbai: Renuka Ramnath’s Multiples Alternate Asset Management Pvt. Ltd is looking to raise a new fund with a corpus of about $500 million, a senior official at the firm said. This will be the second fund raised by Multiples since its inception in 2009.
So far, Multiples has invested about 71% of the $405 million it raised in its maiden fund in 2010. Multiples has a diversified portfolio, which includes investments in South Indian Bank Ltd, film exhibitor PVR Ltd, Indian Energy Exchange Ltd and Cholamandalam Investment and Finance Company Ltd, among others.
“The second fund will also be sector-agnostic. The firm is exploring investment opportunities in the information technology and restaurants space actively," Prakash Nene, managing director and chief financial officer at Multiples, said. Nene added that Multiples will also explore opportunities in consumer businesses. “We have been evaluating quite a few deals in the food and beverage space for a while now."
Multiples was founded by private equity veteran Ramnath, who stepped down from the position of managing director and chief executive at ICICI Venture, the PE arm of ICICI Bank Ltd, to start her own firm. As head of ICICI Venture for over eight years till 2009, Ramnath led some of the landmark investments in the Indian PE industry including India’s first buyout transaction. In 2003, ICICI Venture acquired about 50% stake in Tata group-owned Tata Infomedia and later increased its stake to 63% in the firm.
Multiple’s decision to raise a second fund comes amid a revival in investor sentiment in anticipation of a new, market- and business-friendly government being sworn in after 16 May, when results of the general election will be announced. It is also a possible sign that fund-raising activity is picking up.
Still, Nene said he remains cautious. “We are still being cautious despite the extremely bullish market sentiment. So, far we have been well-placed as most of our investments are only a few years old and we do not have any pressure to exit unlike a lot of other PE (private equity) firms who are at the end of their fund cycle."
Multiples has soft-launched the new fund and reached out to existing investors .
“Multiples has not started its roadshows. We have started discussions with our LPs (limited partners) and only a soft launch of fund has been done so far," Nene said. LPs are investors who put money in venture capital and private equity funds.
Multiple’s first fund was anchored by global institutional investors including the UK’s CDC Group, Canada Pension Plan Investment Board (CPPIB), Dutch pension fund PGGM and pension and sovereign funds from Europe and West Asia. Domestic institutional investors including Life Insurance Corp. of India contributed about 25% to the fund. Nene said that the firm expects to tap more domestic investors for its second fund.
Many large sovereign and pension funds have been looking to India for long-term investment opportunities. For instance, CPPIB formed a joint venture with Shapoorji Pallonji Group in November 2013 to tap opportunities in the India real estate market.
In February, CPPIB announced a strategic alliance with the Piramal Group to create a $500 million real estate finance company in India.
Experts say having institutional investors who are keen on the India growth story will make it relatively easier for Multiples to raise funds. Multiples has the track record, and it has also timed its fund-raising activity with an improvement in India’s macro-economic story, said Siddharth Shah, a partner at Khaitan and Co. Shah added that having institutional investors as LPs makes it easier for a PE company when it seeks to raise a fresh fund.
Most funds dedicated or focused on India have found it difficult to raise money over the past few years on account of slowing economic growth, depreciation of the rupee, and policy and regulatory issues. That would appear to be changing.
Since the beginning of 2014, 13 India-focused funds have finished raising money for their funds, compared with 14 funds for the whole of last year and 25 funds in 2012. According to data provided by deal tracker VCCEdge, since January, 25 India- focused funds have already raised about $5 billion from LPs against 49 PE firms raising $8.4 billion during the whole of last year. Most of these funds are global ones that have a substantial focus on India.
There are few India-based funds that have raised large sums for their funds. In September 2013, IDFC Alternatives Ltd, the PE arm of IDFC Ltd, raised $644 million.
Multiples is looking to close its fund over the next 12 months.