Sarona Asset Management Inc, a Canadian asset management firm, has completed the first five investments from Sarona Frontier Markets Fund 1 LP, a growth equity fund investing in micro, small and medium sized enterprises in Mexico, Africa and India.
Sarona Frontier primarily invests in microfinance and renewable energy space in South Asia, and small-to-medium sized enterprises in Mexico, Africa and India. Of the five deals, two are in India that include MicroVest II, LP, a fund which invests in microfinance institutions supporting micro-entrepreneurs; and SEAF (Small Enterprise Assistance Funds) India Agribusiness International Fund, a fund that invests in agribusiness SME in India, said a company statement. The other three investments of the fund are in Mexico, Africa and South Asia.
SEAF India investment is believed to be the latest investment from the fund. SEAF India is in the midst of raising its $75-million fund targeting food and agri related business. VCCircle was the first to report the story about fund raising in April last year. However, the development regarding the fund close is not known.
SEAF India had been investing in India with Kotak Private Equity through a $160-million India Growth Fund. With Kotak, it was particularly involved in connecting Indian companies to markets in the United States, Europe, Latin America and East Asia. One of the portfolio companies of SEAF's India Growth Fund is Hyderabad-based engineering, procurement and construction company ICOMM Tele Ltd, which is also planning for an initial public offer (IPO). SEAF India planned to go solo with its own fund with the agri plan in February 2009.
In response to a query, a top executive of SEAF India Investment Advisors declined to divulge details on Sarona’s investment at this stage, saying that the fund raising is in the process. A VCCircle mail written to Sarona Asset Management president Gerhard Pries asking details on SEAF India investment did not elicit any response till the time of posting the story.
Pries, in the statement, however, said, “We believe these investments will demonstrate that investing in places like Africa and in sectors like microfinance, agriculture and renewable energy will show commercial investors that one can do well and do good. We not only believe strongly in the financial case for SME in developing countries, but also in the ability to achieve positive social and environmental impact through such investments.”
Sarona is a boutique investment firm based in Waterloo, Ontario in Canada, and runs a number of impact investment funds, including the Sarona and MicroVest groups of funds. Together, these funds have over $180 million in assets under management in developing and emerging countries around the world.
In recent times, a number of PE and VC deals were struck in agri space in India. Summit Partners, a Boston-based private equity investor, even made its debut deal in India putting in $30 million in Krishidhan Seeds Ltd (KSL), a commercial seeds manufacturer based in Maharashtra.
Also, a recent CII-KPMG study said, “India needs about $1.3 trillion investment over the next three years to sustain a GDP growth of 7-9%. This translates to $60-100 billion of VC/PE investments requirement over three years, against which industry estimates that PE investments would be in the range of $9-10 billion in the year ending December 31, 2010.”