Private equity firm Jashvik Capital, which invests in mid-market healthcare and consumer sector-focused companies, has launched its maiden fund. In an interview, Naresh Patwari, founder and managing partner, discussed how the fund aims to identify high-growth companies in large addressable markets. Edited excerpts:
Jashvik has launched its maiden fund. What will be the key areas of focus?
We launched our fund in July and intend to raise $350 million, with a hard cap of $400 million. We are flexible about deal size and are willing to invest from $10 million to $50 million from our funds. We aspire to build Jashvik Capital in a manner that all stakeholders feel that emotion about the firm. We have a differentiated and distinctive strategy. We invest only in industries that we know extremely well, that is healthcare/pharma and consumer. We invest only in profitable businesses growing at more than 18% annually in large addressable markets. We want to partner with exceptional founders and help accelerate growth, make their businesses resilient and future-ready. We want to build mid-market champions in the healthcare and consumer sectors in India.
What does the deal-making environment look like amid looming recession fears in the West?
It is a very exciting time for investors and deal makers in our country. Indian private equity is well positioned to outperform other asset classes in the medium term. The overall economic growth outlook is strong at 7-8%. The policy framework is stable and continually improving. Businesses are feeling confident about the future and appear willing to invest for growth. If we are buying in the next 1-2 years, we will likely see margin expansion by the time we look to exit. Finally, as Indian PE continues to mature as an industry, the quality and depth of liquidity options will continue to improve from the recent strong baseline. I expect late-stage growth equity to meaningfully outperform other alternatives. Profitable growth becomes more valuable on the other side of any bull market. The country has many small and medium-sized businesses that are resilient, profitable, growing, and that have stood the test of time. We have an opportunity to invest in these businesses and strengthen and scale them meaningfully.
Capital is expected to become scarce and expensive in the foreseeable future. How are the private equity funds expected to fare in this scenario from a fundraising perspective?
Given what is happening with interest rates and liquidity at the global level, providers of capital will be even more discerning and thoughtful about where they invest. At the same time, high inflation and concerns about economic growth in many parts of the world including Europe, the UK, China, and to some extent, the US, make it even more important to allocate capital to top PE fund managers to deliver outperformance in your portfolio. Thankfully, India presents an attractive option for investors globally. We will likely be the fastest growing large economy at least for the medium term, if not longer.