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Ajay Relan, who recently quit as the managing director and India head of Citi Venture Capital International (CVCI), is raising a $500-$750 million India-focused fund. The fund will be mainly raised from overseas investors such as insurance companies, sovereign funds, endowments and pension funds, Relan said in an interview to Mint. He is also joined in this venture by Jayanta Basu, who quit with Relan as vice-president of CVCI India.
Though Relan has not given a name to the fund, he has already started contacting investors and preparing a placement memorandum. Talking about his new fund’s investment strategy, Relan said that he would look to invest in companies with pricing power and embedded competitive advantage and market leadership, operating in industries having some barriers to entry. Relan plans to set up his office by October this year and expects that first investment will be made in the next 3-6 months.
The investors to the new fund would be overseas institutional entities such as insurance companies, sovereign funds, endowments and pension funds based out of Singapore, Hong Kong, London, New York and San Francisco.
For the new fund, Relan remains pretty upbeat about investing in the financial services sector. Under Relan, CVCI had invested in several broking firms such as Sharekhan, Anand Rathi Securities and Globe Capital Markets. The new fund will also invest in technology, ancillary infrastructure, media and entertainment.
Relan is also upbeat about the timing of his fund as the stock markets are down. He said that he would have been more afraid to start this venture if the BSE was at 25,000.
Relan had joined CVCI in 1995 and under him it has made investments such as Suzlon Energy, Spentex Industries, HT Media, Polaris, i-Flex, Jai Balaji Industries, BGR Energy Systems, among others.
Talking about his departure from CVCI, Relan said: “It is a passion to see if one can replicate the success that he has seen as an employee of CVCI as an entrepreneur.”
After Relan’s exit last week, Citi Venture announced that PR Srinivasan will take over as India head as Managing Director (Region Head – India).