Investors in Fund III include global institutions such as the International Finance Corp. (IFC), UK’s CDC Group and German investment group DEG, besides a number of large, global endowments, pension funds and family offices.
On 13 December 2018, Mint had reported that CDC Group plc, a development finance institution owned by the UK government, had invested $25 million in the fund.
In December 2017, the PE firm had said that Lighthouse India Fund III had received commitments of $20 million from IFC, the private investment arm of the World Bank group. It had achieved its first close at $150 million in March 2018.
IFC AMC, its asset management unit, was also considering a parallel investment of up to $25 million in the fund, which would have taken the investor’s total commitment to $45 million, the PE firm had said last year.
Lighthouse has backed top brands such as ethnic snacks maker Bikaji Foods, premium ayurvedic personal care brand Kama Ayurveda, ethnic lifestyle brand FabIndia and leading sanitary ware brand Cera. Its other portfolio companies include laminates maker Stylam Industries, quick service restaurant chain Wow! Momo and value retailer V2 Retail.
Lighthouse plans to invest ₹50-300 crore in the new fund and aims to assist companies with operational enhancement, marketing and sales optimization, M&A, and human capital enhancement.
The third fund has already made four investments. Mint had reported on 5 December 2018, that it had acquired a minority stake in Aqualite for ₹250 crore.
Last November, the fund had invested ₹ 160 crore in Duroflex, a leading mattress brand in south India.
In September, it had backed beauty retailer Nykaa with ₹ 113 crore, and in June, it had infused ₹83 crore into Tynor Orthotics, a manufacturer and exporter of orthopaedic and fracture aids.
Last month, Nykaa said that it has raised ₹100 crore from TPG Growth, the growth investment arm of the private equity firm, to take its valuation to ₹5,000 crore.
Lighthouse had raised $100 million for its first fund in 2009, followed by a $135 million second fund. It has invested in 17 companies since then. Lighthouse closed its second fund in 2015 at $135 million, receiving a $42 million investment commitment from the US government’s development finance institution, Overseas Private Investment Corp.
“We’ve built an expertise around consumer brands and we don’t plan to change that strategy. But that being said, we would evolve as the market evolves and also look to back companies such as a Kama Ayurveda or Nykaa, which while different from traditional firms, fit into our strategy," Mukund Krishnaswami, partner, Lighthouse said over the phone.
Another private equity fund, JM Financial Ltd is set to hit the final close of its ₹600 crore second private equity (PE) fund, Mint had reported on 29 April.
The fundraising by Lighthouse comes amid a surge in private equity and venture capital funding in the last couple of months, with deals and exits across sectors, including real estate, infrastructure and a growing tendency to buyout firms.
Private equity (PE) and venture capital (VC) investments hit a record monthly high of $7 billion in March, growing more than twice compared to the same period last year, according to EY’s Private Equity Monthly Deal Tracker, Mint had reported on 25 April. March 2018 had witnessed PE/VC investments of $3 billion.
As a result of the exceptionally high level of PE/VC investments in March 2019, the first quarter emerged as the best-ever quarter for PE/VC investments, with investments worth $11.4 billion, which is 37% higher compared to the same period last year, and almost one-third of the value recorded in 2018.