Aditya Birla Group has announced a $250 million mid-market focused private equity fund. Aditya Birla Private Equity Fund is currently on the road to raise capital, which will be partly onshore and offshore. The funds anchor investor will be Kumarmangalam Birla , the head of Aditya Birla Group, and his investment companies who will be committing 20% to the $250 million corpus.
The fund expects its first close at $100-$125 million around the second quarter, said Bharat Banka, MD & CEO of Aditya Birla PE, in an exclusive interview to VCCircle.
Banka also clarified that the private equity fund is not a corporate venturing vehicle for the group, but is “clearly another business line within Aditya Birla Financial Services group”.
The AB group has been expanding its presence in the financial services sector and plans to build a $10 billion integrated financial service business. A private equity fund is part of that strategy. “Mutual fund is a product for retail investors and insurance is for protection and private equity is a field for sophisticated investors for wealth building in the long term. So that was something that we felt was an attractive area to get in,” said Banka.
The fund is looking at making 10-15 investments in the range of $20 M across various sectors. Banka added that it would look at picking significant minority stakes in the companies. While it would essentially be sector agnostic in nature, it would focus on consumer facing industries, EPC segment, education, healthcare, logistics, media and entertainment.
Banka has built a private equity team by hiring private equity professionals from both domestic and overseas funds. Aditya Birla PE has hired people from ChrysCapital, IL&FS Private Equity, Europa partners and Kurt Salmon Associates.
The private equity arm has been investing out of the capital committed by Birla. It has picked a minority stake in Bombay Stock Exchange, one of the oldest in the world, through its newly formed private equity arm. The deal was done during the demutualisation process of BSE. Besides this, the fund had last year also picked up 26% in apparel retail chain which operates in north and central India– V Mart. Another investment is a 5% stake in IT solutions provider Core Projects & Technologies for Rs 13.5 crore.