2009 proved to be an extremely challenging environment for fund-raising. Only those with a proven track record of returning capital to investors had a good run while most others had to defer their plans. A small fund size, easily digestible by LPs, also worked for a few like Avigo SME Fund III ($165 million) and Mayfield Fund ($110 million). Here is VCCircle’s top picks of funds that managed the feat.
India Value Fund Advisors
Fund IV: $725M
Leading Indian private equity fund India Value Fund Advisors (IVF) closed $725 million for its fourth fund in 2009. IVFA, which manages $610 million across its three previous funds, typically buys controlling stakes in companies. Some of the companies where it has invested, turned them around and made exits are Shringar Cinemas (now Fame India Ltd), Trinethra Super Retail Ltd, and TTK Healthcare TPA Pvt Ltd. Its current portfolio includes 11 companies such as Music Broadcast Pvt Ltd (runs Radio City), V-Link Travel Solutions Ltd (Meru Cabs), and DM Healthcare (Kerala-based hospital chain).
IL&FS Investment Managers Ltd
Standard Chartered IL&FS Asia Infrastructure Growth Fund: $568M
IL&FS Investment Managers Ltd, one of India's oldest PE firms with $1.9 billion under management, announced the first close of Standard Chartered IL&FS Asia Infrastructure Growth Fund at $568 million. The fund got co-sponsored by Infrastructure Leasing & Financial Services Ltd (IL&FS) and Standard Chartered Bank (SCB). Both invested $150 million each in the fund. The fund has a final target of between $800 million and $1 billion. This would be the first case of Indian fund managers raising a fund with a pan-Asia focus. The fund made its maiden India deal in 2009 by picking up a 5% stake in IL&FS Transportation Networks (ITNL) for Rs 130 crore.
NYLIM Jacob Ballas
Fund III: $440M
India-dedicated private equity fund NYLIM Jacob Ballas India Fund III raised total commitments of $440 million for its third fund. The fund's anchor investor remained New York Life Investment Management Many of Jacob Ballas’ existing investors also returned in this fund. About 85% of Fund III’s investors are financial institutions, sovereign funds, pension funds and funds of funds, while 15% comprise reputable family offices and private investors. Previous investments of Jacob Ballas include Aster Teleservices, Mahindra Holidays and Resorts, Saravana Global Energy, Bharti Airtel, Reliance Energy, Punj Llyod, Avesthagen and Thomson Press. Jacob Ballas, a private equity fund based out of New Delhi, has closed 18 investments since its formation in 1995.
IAF III: $350M
ICICI Venture Funds Management Co, the private equity arm of India’s largest private sector lender ICICI Bank, completed the first close of $250 million (Rs 1,175 crore) for its latest fund, India Advantage Fund Series 3 (IAF 3), led by capital-raising from domestic banks and retail participation from high networth individuals. Later, it topped off the first close of the latest fund, at $350 million from $250 million. IAF 3 has a soft target of $500 million, and it could raise a further $300 million. The second close at $450-500 million is expected by this financial year-end. The new fund will look at infrastructure derivatives and the consumption story as it starts chasing both growth capital and buyout transactions.
First Close of India Fund: $110M
Mayfield Fund, which has been investing in India from its global fund, announced its first ever India-focused venture capital fund with a corpus of $110 million. This fund will be invested by the firm's Mumbai office, which has two managing directors Nikhil Khattau and Vikram Godse. The fund will focus on consumer, infrastructure ancillary, and tech and tech-enabled sectors. It will invest in companies which have revenues ranging from $5-50 million.
The investment ticket size will be $5-15 million. Mayfield has already invested about $16-17 million in three companies from the new fund. They are Geodesic Techniques, Paymate, and Genesis Colors. Mayfield’s other portfolio companies include Tejas Netowrks, Consim Info, Servomax, and IL&FS Investsmart. Mayfield is also a limited partner in Seedfund, an early stage investment fund.
Aditya Birla PE
First Close: $100M
Aditya Birla Private Equity - Fund I received commitments, mostly from domestic investors, in excess of Rs 500 crore as its first close for a $250-million mid–market PE fund. The fund has been warehousing the anchor investment from parent Aditya Birla Group. Some of its investments include a minority stake in Bombay Stock Exchange, 26% in apparel retail chain V Mart and 5% stake in IT solutions provider Core Projects & Technologies. Aditya Birla PE’s Fund I is targeting 10-15 investments, averaging $20 million in each. It targets consumer-facing companies, EPC segment, education, healthcare, logistics, media and entertainment.