JM Financial Ltd is set to hit a final close of nearly ₹600 crore for its second private equity (PE) fund, said two people aware of the matter.
The Mumbai-based financial services firm is engaged in investment banking, wealth management and private equity, institutional equity sales, trading and broking, among others. In April 2018, Mint reported that the firm had managed to tie up around ₹300 crore as part of the first close of the fund. A first close allows a fund manager to start investing the capital that was raised, while allowing it to continue to raise more funds from investors.
“JM has tied up close to ₹600 crore and is expected to formally close its fundraise soon. The capital has largely been raised from HNIs (high net-worth individuals) and family offices," said the first person cited above, requesting anonymity, as he is not authorized to speak to reporters.
In August 2016, Mint reported JM Financial’s PE business was planning to raise a second PE fund.
Also in 2016, JM had appointed Darius Pandole, former partner at New Silk Route (NSR) Advisors Pvt. Ltd, to look after the group’s PE business.
Pandole joined NSR at its inception in February 2007. NSR invested close to $1.4 billion in India and emerging economies in Asia across around 17 investments.
Pandole was also associated with IDFC Private Equity Ltd, which he joined in February 2003, and went on to become its chief operating officer.
JM Financial’s first PE fund was co-sponsored by Old Lane Partners, a hedge fund run by Vikram Pandit, which was later acquired by Citigroup.
The first fund committed capital in companies such as Mumbai-based pharmaceuticals firm DiagnoSearch Life Sciences Pvt. Ltd, salon chain Enrich, offshore logistics services firm Samson Maritime Ltd, farm equipment maker International Tractors Ltd, auto parts company Sona Group, knowledge process outsourcing firm PreMedia Global and microfinance firm Spandana Sphoorty.
According to the second person cited above, JM has managed to raise significant capital for its second fund on the back of the performance of its first fund.
“The first fund made around 13 investments and has completely exited around 10 of them and part exited the others, delivering strong returns," he said.
An email sent to JM Financial did not elicit any response.
Indian private equity and venture capital industry has seen strong fundraising momentum in the recent years, according to alternative assets data tracker Preqin.
According to a report by Preqin, 2017 marked a record 35 India-based fund closures, securing an aggregate $3.6 billion, an all-time high.
The trend continued in 2018 with 26 funds raising $3.3 billion.
“This growth has accelerated since 2015, spurred by strong fund-raising momentum: 2015 set a fund-raising record for the country, only for 2017 to surpass it, and annual capital totals have exceeded $2 billion in the past four years," said Preqin.
India-based private equity and venture capital fund managers now hold $28 billion in assets under management as of June 2018 (the latest data available), up from just $10 billion at the end of 2008, Preqin said.