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NEW DELHI/BENGALURU : Waterfield Advisors, a Mumbai-based wealth advisory firm, has announced the final close of its first fund of funds (FoF) at 540 crore from family offices, ultra-high net worth individuals, and institutional investors, two senior executives said.

The FoF invests in private equity (PE) and venture capital funds and also co-invests in growth or late-stage bets in the funds’ portfolio startups with an exit horizon of four to five years.

“The fund was slightly oversubscribed as initially, we were looking to raise 500 crore," Siddharth Jhunjhunwala, head of Waterfield Advisors’ FoF, said in an interview.

The fund hit the first close of 200 crore in June last year, nearly three months after receiving Sebi approval.

Waterfield Advisors is also looking to launch its second FoF with a corpus of $250 million and expects to make the first close by the first half of 2023, Jhunjhunwala said. “Vintage alignment is key in this business, and we believe that several quality fund managers are expected to hit the markets again in 2024. We’ve got to have the funds for evaluating and investing at that time," he said.

The first FoF is looking to deploy 70% of the funds in VC and PE funds, while the rest will be allocated towards direct investments in startups in financial services, consumer, healthcare, and tech sectors. “Based on the pipeline, the fund could potentially be fully committed by the first half of 2023," he said.

To date, the FoF has made five investments, including commitments towards a PE fund, and seed and growth funds such as A91 Partners, Fireside Ventures, and India Quotient. FoF invests in the range of $7million-$10 million.

The FoF makes co-investments in startups that are part of the VC and PE funds it has invested in. So far, the FoF has made one such co-investment in an undisclosed consumer company and expects to close two more deals soon, with a ticket size of $3-$5 million.

“We’re looking to co-invest in companies which are fairly de-risked (sweet spot of upwards of $300million in valuation) and are either already profitable or nearing break even," Jhunjhunwala said.

So far, from the FoF, Waterfield Advisors has committed 65%-70% of the capital and has deployed 25-30% in VC and PE funds, including co-investments.

“Co-investment opportunities provide faster returns in comparison to fund investments which start showing distributed to paid-in capital in the sixth or seventh year of investment," Jhunjhunwala said.

“Arriving at the final close of our first fund, we have got a great set of general partners across all the stages of investing, and the portfolio is extremely thoughtfully constructed," said Rohan Paranjpey, managing director of alternative investments, Waterfield Advisors.

Set up in 2011 by Soumya Rajan, Waterfield Advisors advises on behalf of several prominent Indian business families on financial and estate planning, succession planning, family governance and investment management services, among other services. The company has offices in New Delhi, Mumbai, Chennai, Bengaluru, Kochi and Hyderabad.In February, it closed a $6 million funding round from single-family offices, ultra-high net-worth individuals and existing investors. The firm’s total assets under management exceed $4 billion.

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