Private equity major Actis has raised a $2.9 billion private equity fund, Actis Emerging Markets 3 (AEM3) for emerging markets of Africa, China, India, Latin America and south-east Asia. This is one of the largest dedicated emerging markets private equity funds closed this year and doubles the amount raised by Actis in 2004. The new fund will invest $1 billion in India over a period of 3-4 years.
AEM3 includes commitments from a group of 100 investors from across the globe, including a number of first time investors in emerging markets.
The fund will invest a minimum of $50 million in buyout and growth transactions. In a statement issued from the firm, Paul Fletcher, Senior Partner at Actis said, “We are delighted to have assembled such an outstanding group of investors who continue to recognise the opportunities for private equity investment across the emerging markets, despite the current economic climate.”
JM Trivedi, Partner and Actis head for South Asia said, “Actis has been a consistent private equity investor in India for more than ten years and is recognised as being a pioneer in management buyouts in the market.”
Helix Associates Limited, a wholly owned subsidiary of Jefferies Group Inc, acted as a global placement agent for Actis.
Actis was earlier known as CDC Capital Partners, and in 2004, it was spun out as an independent and privately controlled fund manager for the emerging markets. CDC Group, the UK government-backed private equity fund of funds, has invested $650 million in its latest $2.9 billion new fund. Actis’ real estate fund for India had raised $100 million from CDC Group.
Actis has had several good exits in India. It exited its investment in Punjab Tractors (which was acquired by Mahindra) and UTI Bank. It has also made exits like Glenmark Pharmaceuticals, BPO company Daksh, and Sify. It’s strategy of doing buyouts in India also paid off very well in the country and its current portfolio includes Nilgiri Group, Nitrex Chemicals, AVTEC, Dalmia Cement and Jyothy Laboratories.
Anubha Shrivastava, Portfolio Director, South and South East Asia commenting on her views on Actis, , “We are bullish on Actis. We like the team very much. We are very positive on it. I think Actis (strategy) has paid paid off very well. They were the pioneers for the buy-outs in India. We’d like to see more transactions, in fact, more controlled transactions in their portfolios. Obviously, it depends on environment and again what is credible and what works for Indian entrepreneurs and for Indian GPs. But we are overall happy with their strategy going forward.”
The close of Actis’ fund comes at a time when fund raising has become extremely difficult and limited partners like pension funds,endowment funds and other institutional investors are cutting down their allocations to private equity funds and rebalancing their portfolio.