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HarbourVest expects ‘material increase’ in India investments
Summary
The private markets firm has invested at least $1.5 billion across multiple strategies in India.
US-based private markets firm HarbourVest Partners, a backer of Indian private equity funds ChrysCapital and Kedaara Capital, is scaling up its funds and direct investments in India, joining a lengthening line of firms turning their attention to the country.
“In India, we've been on a deployment ramp over the past 10 years. If we look at the capital that we deploy annually, the proportion that's going to India has been on an uptrend," said Kelvin Yap, managing director, HarbourVest, in an interview with Mint.
The firm has at least $1.5 billion invested in India across three strategies: primary funds, secondary transactions, and direct co-investments.
“We expect a material increase in investments in India. We expect to see at least 25% growth in investments in India this year and over the next few years," Yap added.
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Yap, based in Singapore, focuses on fund investments and direct co-investments in the Asia Pacific region. HarbourVest has offices in Beijing, Hong Kong, Singapore, Seoul, Sydney, and Tokyo, with over $125 billion in assets under management as of 31 December 2023.
HarbourVest has been working with Indian fund managers for over a decade, with investments spanning venture, seed, growth-stage, and buyout funds. It also has direct investments in companies such as ShareChat and Jana Small Finance Bank, according to data platform VCCEdge.
“The macro picture for India looks great. There are positive structural changes which promote further expansion of the India middle class. That is expected to drive rapid consumption growth," Yap said, explaining why it is scaling its investments in India.
"Additionally, India is a beneficiary of a global trend towards supply chain diversification. That is a positive catalyst for India’s manufacturing and export sector. This is an interesting backdrop for us to invest into."
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Yap noted that the firm is invested in "more than a handful of VC funds" in India, without naming specifics.
“We remain excited about early-stage venture, because in our view, innovation never stops. We participate through the top venture managers. In recent years, we have been focused more on early-stage venture, over mid-stage or late-stage growth," Yap said.
In April this year, both Kedaara Capital and ChrysCapital announced fundraising milestones. Kedaara Capital's fourth India fund raised $1.7 billion, with HarbourVest as an investor. ChrysCapital's $700 million continuum fund, announced this week, also has HarbourVest among investors.
Yap added that the Indian market is seeing "a lot more buyout transactions today" compared to the past. “Sectors that have generated strong private equity returns include healthcare, pharmaceuticals, IT services, business services, consumer, and financial services," he noted.
