Avendus Asset Management Ltd may raise up to Rs 1,250 crore ($173 million) for its second Future Leaders Fund which aims to make late-stage investments in mature companies in consumer, financial services and digital segments, a senior executive told VCCircle.
On Thursday, Future Leaders Fund II said it had marked the first close with aggregate commitments of Rs 584 crore ($78.5 million). First close is a fundraising milestone after which a fund typically deploys money for investments.
The sum raised for the first close is higher than the total corpus of the first fund which raised Rs 375 crore and made investments in Delhivery, National Stock Exchange, Dailyhunt’s parent, Lenskart, Bikaji Foods and Ujjivan Small Finance Bank.
Future Leaders Fund II aims to invest approximately $10-15 million each in 8-10 companies in digital, consumption and financial services segments, managing partner Ritesh Chandra said.
The Category-II alternative investment fund is targeting to raise Rs 750 crore with a greenshoe option of another Rs 500 crore. It has a five-year tenor with an option to extend it by another two years.
The fund is most likely to exercise the greenshoe option which will take the hard cap to Rs 1,250 crore ($168 million), Chandra said.
Insurance, fintech and asset management segments look interesting within the financial services category, he added, saying that the fund would also closely look at food, beauty and cosmetics segments in the consumer category.
“Within the consumer segment, my sweet spot continues to be food,” Chandra said.
“We are excited by the opportunities that the pandemic has presented. As a country, we are seeing massive adoption in consumer-tech but we also see a global opportunity for IT (information technology) services and product companies from India,” he added.
Chandra noted that deal valuations are “not inexpensive" currently which “makes our job harder”. The second fund will aim to deploy corpus over an 18-24 month period, he said. The first Future Leaders Fund’s life spans till 2025.