ICICI Venture, the private equity arm of India's largest private-sector lender ICICI Bank, said on Wednesday it has raised $190 million (Rs 1,263 crore) to mark the first close of its new sector-agnostic fund.
The first close is a fundraising milestone for alternative investment firms such as PE and VC funds, and allows them to start deploying the money garnered from the initial commitment.
ICICI Venture didn’t give the target fund size but VCCircle first reported in December that the firm was looking to raise $500 million. It had formally floated the India Advantage Fund Series IV a year ago and is eyeing as much as $440 million from offshore investors.
The company said it has received investment commitment from an Asian sovereign wealth fund that it didn’t name. Singapore's GIC, the UAE's Abu Dhabi Investment Authority and Malaysia's Khazanah are some of the more active Asian sovereign funds in India.
ICICI Venture, which also has mezzanine and special situations funds, had previously raised three sector-agnostic PE funds. The last fund, launched in 2009, was raised locally. With the latest fund, it has gone back to woo foreign investors after a gap of nine years when it raised its second PE fund overseas.
The firm had previously raised three sector-agnostic PE funds
The company started its PE practice in 2003 with the first fund of $245 million. The second fund came in 2006 with a corpus of $810 million. The third fund raised $400 million.
ICICI Venture, once India's top PE firm by assets under management, was left behind in the PE business as its peers raised new funds while it focused on managing the portfolios of its legacy funds and deploying the dry powder of the last fund vehicle.
It has been raising a large infrastructure-focused fund but has met with limited success even as others such as IDFC Alternatives scooped a large fund. ICICI Venture had also entered into an initial pact with Tata Power Company Ltd to set up a co-sponsored power platform company. So far, the company has not announced any development in this direction.
The PE firm did manage to raise a large $825 million special situations fund under AION, its joint venture with Apollo Global.
It would be looking to up its game plan with the new sector-agnostic fund. For the year ended on March 31, 2015, ICICI Venture Funds Management Company Ltd's total income declined to Rs 119 crore from Rs 136 crore in the previous year. Net profit slumped to Rs 87 lakh from Rs 33 crore.
“By growing core practices, our aim is to add more cash reserves that are ready for fresh capital deployment, as opportunities arise,” said Prashant Purker, managing director and CEO, ICICI Venture.
Limited partners (LPs), who are investors in PE and VC funds, have backed several India-focused fund houses over the past year. Everstone and India Value Fund Advisors are among the firms that raised large PE funds while several VC funds also built new vehicles.
Most recently, Overseas Private Investment Corporation, the US government’s development finance institution, committed $625 million to a clutch of international PE and VC funds that have India among their target markets.
Some other funds that are on the road to raise money include CX Partners and Multiples Private Equity. Multiples, floated by former ICICI Venture CEO Renuka Ramnath, recently got commitment from International Finance Corporation for its $600 million second fund.