Eredene Capital Plc, a London-based Alternative Investment Market (AIM)-listed fund which invests in Indian infrastructure, is targeting the first close of its private fund by the end of this year.
The publicly-listed asset manager hit the market during 2008–2009 to raise $300 million in a private fund in a typical LP-GP relationship outside of the public markets. However, with a challenging market situation, its fund-raising plans got deferred.
It has now roped in Lazards of UK as the finnacial advisor for the fund-raising activity. A top company official told VCCircle that the roadshows received significant interest from the LPs and that they will make the first close soon. The fund-raising is seeing interest from Europe, Gulf and Asia for the new independent private fund with a target size of up to $300 million. Also, with the improved public markets, it also has the flexibility of tapping funds via the public market route.
"Eredene’s open-ended structure (AIM quoted) allows it the flexibility to raise money within the PLC itself. Given the signs of improved market conditions, this is yet another option available with us to explore", said Ranveer Sharma, Principal, Eredene Capital.
Sharma added that the private fund can also see some anchor investments or be "seeded by some of the public shareholders". Eredene Plc's investor base includes Caledonia Investments, Sofina SA, Jupiter, Henderson Global Investors and Troy Asset Management.
The AIM listed India investor has identified a pipeline of investments to the tune of about $300 million. It has been shortlisted for the final bid stage at three major port projects in India: Ennore Port container terminal where Eredene consortium comprises Grup Marítim TCB (Spain’s leading port operator), OHL (Spanish construction group) and Lanco Infratech; New Mangalore Port container terminal where Eredene consortium includes TCB and Mumbai Port Indira Docks Project where its consortium includes Conti 7 and Master Group.
Sharma added that they have "enough cushion from Fund I to meet immediate needs". Eredene was founded in 2005 and raised $110 million in early 2006 of which it has committed around $100 million across nine projects in India.
Eredene till now has essentially been a ports investor with a portfolio comprising three container freight stations, an inland container depot, a large scale warehousing and distribution operation, two logistics parks and, an IT office complex.
For the second fund, Eredene seeks to increase the ticket size of investments and also expand its investment base. It will put money to work into other infrastructure allied businesses like integrated transport and supply chain management.
"The next fund will continue to focus on Eredene’s successful strategy of investing in Indian ports and port services, logistics, warehousing and transportation. This would also include potential investments in air cargo centres, rail private freight terminals, integrated transportation centres and third party logistics and supply chain businesses", said Sharma.
Sharma said, three of the portfolio firms were revenue generating and that they have an investment horizon of up to 10 years with the fund currently in an investment mode. He added that all their investments are exhibiting signs of a positive investment yield and that since most of the projects were quasi-greenfield, so it did not have a direct impact on any of its investments. "Consolidation should work well in some of the port investments", Sharma added.