Exhilway announces exit from maiden emerging markets PE fund

US-based asset management firm Exhilway Global, which was earlier aiming to build an emerging markets-focused PE firm with India as a centrepiece, has exited from the emerging markets Exhilway Global Opportunities Fund I (EGO – I), according to a press release.

The investment commitments of the funds and management control will now be taken over by its limited partners (LPs).

The exit is part of the asset management firm's plans to focus on its core business that includes M&A advisory, fund placement and index funds management, it said.

The company had faced hurdles with the deployment of funds as the investors were not satisfied with the asset quality and accounting records of the target companies. The new investors will now rebrand the fund, which is expected to conclude by the end of this year.

VCCircle was the first to report that Exhilway Global has given away the management of EGO – I to its LPs following a disagreement over the due diligence process and target companies. The issue was flagged off by a few Exhilway investors who figured out that the valuations of target companies were based on elevated growth projections and even those companies have made it to the list who failed to get funding from other financial institutions and PE funds.

The sector-agnostic fund was launched in March last year with a target corpus of $250 million and managed to get investor commitment of $217 million by November last year.

The emerging markets focused PE fund, which filed with US SEC for its fundraising process in July last year, has so far committed $83 million across 19 companies, many in India. The ticket size of investment varies between $10 million and $50 million.

Exhilway is a multi-asset investment management firm, known for its hedge fund business. It had exited this unit by reassigning the operational rights to a large private investor group in Australia in lieu of market-linked variable royalty, payable every year by the investor group.

Exhilway, which was looking to exit actively managed hedge fund business since the last two years, is now left with business interests in real estate advisory and private equity. It is now looking to set up new market neutral, less risky hedge funds focusing on the emerging markets of Morocco, Hungary, India, Brazil and China along with the developed markets of the US and Europe.

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