Zephyr Peacock, a mid-market private equity fund investing in small and medium enterprises, is looking to raise $150 million for its third India-focused vehicle. International Finance Corporation (IFC), which was also an investor in Zephyr’s second India fund, is looking to invest $15 million or 20 per cent of the total committed capital in Zephyr Peacock India Fund III Ltd.

Zephyr Peacock is part of New York-based Zephyr Management, LP, an emerging markets private equity specialist. Since 1994, Zephyr has sponsored, co-sponsored or managed nine emerging markets private equity funds with total commitments of $1.15 billion. IFC has backed a number of SME-focused funds of private equity firms like Avigo Capital Partners, Aureous Capital and Ambit Pragma Fund.

Zephyr Peacock India Fund I was launched in 2006 while Zephyr Peacock India Fund II, which had raised $48 million, was set up in 2008. The third fund will continue with a similar strategy of acquiring significant minority positions in entrepreneur-led companies that cater to the infrastructure sector, specialty manufacturing, financial services, pharmaceuticals and information technology space. Zephyr Peacock’s team is based in Bangalore and is led by managing director Mukul Gulati.

Zephyr Peacock India Fund II has invested in five companies across telecommunications and IT infrastructure services, renewable energy and healthcare sectors. It has recently infused $5 million for a minority stake in Hyderabad-based Aizant Drug Research Solutions Pvt Ltd, an integrated drug development solutions provider. It has also invested in a renewable energy company but the name has not been disclosed. On the other hand, Zephyr Peacock had exited Manesar-based die-casting maker Maxop Engineering through a buyback in May this year.

In 2010, Zephyr Peacock invested $10 million in the fast-growing IT solutions provider Trimax IT Infrastructure and Services, which filed for an IPO .

Its other portfolio firms include Time Technoplast (a polymer products firm), WLC India (a vocational training provider), Metro Wireless Engineering India (a telecom services company) and Miles Software (a financial services software firm).

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