India Value Fund Advisors raises $700M in new PE fund

Private equity firm India Value Fund Advisors (IVFA) has achieved the final close of its fifth India-focused fund, Indium-V with a corpus of $700 million (Rs 4,471 crore), three months after it marked the first milestone by raising $500 million, a top company executive said.

“We have closed the fund raising (process) and already made three investments,” Vishal Nevatia, managing partner at IVFA told VCCircle. The firm has invested across deGustibus Hospitality Pvt Ltd that owns and operates food & beverage brands like Indigo and Indigo Deli among others. The other two investments include NBFC Magma Fincorp and rollover of its previous investment in Atria Convergence from a previous fund vehicle that was expiring.

PE firms transfer their investment in old portfolio companies into a new vehicle when they remain bullish on a company and want to stay invested but the fund through which they invested comes to an end of its lifecycle. PE funds typically have a lifecycle of 5-10 years.

The news of final close of the new fund was first published by Mint.

IVFA, which chases control-oriented deals, besides the conventional growth equity transactions in India, had formally launched the new fund last November. Over 25 investors, including sovereign funds, pension funds and fund of funds from across the globe, invested in this fund vehicle, IVFA had said early this year.

This makes it one of the quickest fundraisers for a PE fund of such quantum and the largest sector agnostic PE funds raised to invest in India in the recent past. Two other large funds with over $800 million corpus have been raised in the past one year. However, one of these was a special situations fund and the other was an infrastructure-focused fund.

Everstone and Multiples PE are in the process of raising their new funds of a similar size. Global VC firm Sequoia Capital, which makes both venture capital and growth equity investments in India, added $210 million to the $530 million it raised last year for its fourth India-focused fund, taking the total fund size to $740 million.

IVFA had raised $600 million in its fourth fund in 2009 which also had an initial target of $700 million but had to be reduced due to tough market conditions. Its predecessor had raised $400 million in 2007. Prior to that IVFA had raised $175 million in 2005 after starting off with a $35 million fund in 2000.

Currently, IVFA has a team of 25 investment and operating professionals with experience across investment and advisory services. The new fund will follow the same strategy of minority as well as control investments.

It will focus on mid-market companies in the consumer, healthcare, food, IT/ITES and financial services sectors.

Several PE and VC firms are on the road to raise new funds as positive sentiment around Indian economy has attracted investment interest from global LPs. Some have also raised new funds.

Venture Capital firm Accel Partners recently raised a $305 million India-focused fund while SAIF Partners, which makes both early stage VC investments as well as growth equity deals, raised $350 million in its new India fund. Creador raised $330 million to invest in India and Southeast Asia.

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