Back360 One to set up sector-focused private equity funds
The firm plans to launch thematic funds, starting with a healthcare fund, and will focus on sectors such as financial services, consumer, and technology
Premium360 One WAM Ltd, formerly IIFL Wealth, is charting a course toward a sector-focused private equity fund strategy, building a separate identity in an industry primarily known for broad sector investments.
With assets under management crossing ₹23,000 crore or $2.6 billion, 360 One is one of the leading domestic private investors in India
“On the PE side, our right to win an edge will be industry-focused thematic funds. And, so, you will see us being much more industry-led, going forward," said Sameer Nath, chief investment officer in his first formal interview since taking over as CIO and head of venture capital and private equity business. “I don’t think we are set up to compete as generalist (on the PE side). The industry-led approach is really going to serve us well," he added.
The first private equity thematic funds will be launched later this year, he added. “We will be coming to the market with a healthcare fund. We are seeing tremendous interest in that space," he said.
Nath said the company will reveal the specifics such as the fund size closer to the launch date. The Indian PE market is now matured to absorb sector focussed funds and major sectors don’t hold a concentration risk anymore, he added.
It will focus on healthcare, financial services, consumer as well as technology. “We’re not saying that we’re going to pick some new esoteric sector; they are probably most active sectors for VCs and PEs. There is traditional and digital in all of these segments -- we’ve done a lot of homework on them."
The firm already has a fund investing in tech-first companies such as Byju’s, Upgrad and Pharmeasy. It invested in Series B and Series C stages.
For financial services, it may not focus much on fintech but will choose areas with less regulatory overhang. “There is a lot of underserved in financial services, across NBFCs, banks, small finance bank, insurance, credit cards,, and there is still a lot to play for," Nath said.
The firm invests counts VC funds such as Chiratae, Orios, Saama and Kae Capital in its fund of funds portfolio.
Nath gave an example of the 360 One’s financial services pre-IPO fund launched in 2020 which has registered one of its best IRR (internal rate of return) so far. While a pre-IPO fund has a life cycle of five years, a private equity fund is set up for 8-10 years.
“We launched a private equity pre-IPO fund which was wholly focussed on financial services. It was a ₹1500 crore fund, which focused only on financial intermediaries. It invested in companies such as National Stock Exchange, Transunion, NSDL among others," he said.
A large part of its investments also happen through co-investments that it’s investors seek to do with the firm when select opportunities come along. “Total, along with our co-investments, we would have invested way more than $3 billion," Nath, who was previously the cofounder of venture capital fund Iron Pillar said.
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